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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13, or 15(d) of the Securities
Exchange Act of 1934 Date of Report (Date of earliest
event reported) June 21, 1996
WESTPORT BANCORP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-12936 06-1094350
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
87 Post Road East, Westport, Connecticut 06880
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (203) 222-6911
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 1. Changes in Control of Registrant.
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On June 21, 1996, Westport Bancorp, Inc. (the "Company") entered into
an Agreement and Plan of Merger (the "Agreement") by and among HUBCO, Inc.
("HUBCO"), the Company and The Westport Bank & Trust Company (the "Bank").
Pursuant to the Agreement, at the Effective Time (as defined in the Agreement),
the Company shall be merged with and into HUBCO (the "Merger") and HUBCO shall
be the surviving corporation. At HUBCO's option, at the Effective Time, and
simultaneously with the Merger, the Bank shall be merged (the "Bank Merger")
with HUBCO's principal Connecticut bank subsidiary (the "Connecticut Bank" or
the "Surviving Bank").
Pursuant to the Agreement, in the Merger, each share of common stock,
$.01 par value, of the Company ("WBI Common Stock"), issued and outstanding
immediately prior to the Effective Time (other than dissenting shares and
excluding treasury shares and shares held by HUBCO) shall be converted at the
Effective Time into the right to receive 0.3225 of a share of common stock, no
par value, of HUBCO ("HUBCO Common Stock"). Each share of Series A Convertible
Preferred Stock, $.01 par value, of the Company ("WBI Preferred Stock"), issued
and outstanding immediately prior to the Effective Time (excluding treasury
shares, shares held by HUBCO and dissenting shares) shall be converted at the
Effective Time into the right to receive one share of a newly created series of
HUBCO preferred stock having terms substantially identical to those set forth on
Exhibit 2.1(a) to the Agreement. Cash shall be paid in lieu of fractional shares
of HUBCO Common Stock.
Stock options which, as of the Effective Time, are outstanding and
fully vested and exercisable as to all of the shares of WBI Common Stock that
are subject to such option (including options that became exercisable as a
result of the transactions contemplated by the Agreement) (each a "Vested Stock
Option") shall be converted at the Effective Time into HUBCO Common Stock to the
extent permitted under the plans and agreements under which such Vested Stock
Options were granted (each Vested Stock Option so converted, a "Converting Stock
Option"). Each stock option outstanding at the Effective Time (i) which is not a
Vested Stock Option or (ii) which is a Vested Stock Option and which is not a
Converting Stock Option shall be converted into an option to purchase HUBCO
Common Stock. At the Effective Time, each warrant to purchase shares of WBI
Common Stock which is outstanding at the Effective Time shall be converted into
a like warrant to purchase HUBCO Common Stock.
The Agreement provides that two nominees, designated by the Company and
acceptable to HUBCO (which persons shall be Michael H. Flynn and David A. Rosow,
unless HUBCO and the Company shall agree in writing to the contrary),
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shall be duly appointed by the Board of Directors of HUBCO to HUBCO's Board of
Directors effective at the Effective Time. Provision shall have been made such
that three nominees, designated by the Company and acceptable to HUBCO (which
persons shall include Michael H. Flynn and David A. Rosow, unless HUBCO and the
Company agree in writing to the contrary) and one person designated by Josiah T.
Austin and acceptable to HUBCO each shall have been appointed as directors of
the Surviving Bank (or shall continue as directors of the Bank if the Bank
Merger is not consummated at the Effective Time). HUBCO also shall cause Michael
H. Flynn to be elected President of the Connecticut Bank and David A. Rosow to
be appointed Chairman of the Executive Committee of the HUBCO Board of
Directors.
The Agreement is attached as Exhibit 2 hereto, and incorporated by
reference herein.
Item 7. Financial Statements and Exhibits.
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c. Exhibits
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Exhibit No. Description
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2 Agreement and Plan of Merger
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SIGNATURE
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.
WESTPORT BANCORP, INC.
Date: July 3, 1996 By: /s/ Michael H. Flynn
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Michael H. Flynn
President and Chief Executive Officer
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INDEX TO EXHIBITS
Exhibit
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Number Exhibit Description Page
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2 Agreement and Plan of Merger . . . . . . . . . E-1
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AGREEMENT AND
PLAN OF MERGER
by
and
among
HUBCO, INC.
and
WESTPORT BANCORP, INC.
and
THE WESTPORT BANK & TRUST COMPANY
Dated: June 21, 1996
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TABLE OF CONTENTS
Page
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ARTICLE I - THE MERGER.......................................................1
1.1 The Merger........................................1
1.2 Effect of the Merger..............................1
1.3 Certificate of Incorporation......................2
1.4 By-laws...........................................2
1.5 Directors and Officers............................2
1.6 Effective Time and Closing........................2
1.7 The Bank Merger...................................3
ARTICLE II - CONVERSION OF WBI SHARES, OPTIONS AND WARRANTS..................3
2.1 Conversion of WBI Stock...........................3
2.2 Exchange of Certificates..........................5
2.3 Stock Transfer Books..............................7
2.4 Dissenting Shares.................................8
2.5 WBI Stock Options.................................8
2.6 WBI Warrants......................................9
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF WBI.........................10
3.1 Corporate Organization...........................10
3.2 Capitalization...................................11
3.3 Authority; No Violation..........................12
3.4 Financial Statements.............................13
3.5 Broker's and Other Fees..........................14
3.6 Absence of Certain Changes or Events.............14
3.7 Legal Proceedings................................14
3.8 Taxes and Tax Returns............................15
3.9 Employee, Director and Officer Benefit Plans.....16
3.10 Reports..........................................18
3.11 WBI and Westport Information.....................19
3.12 Compliance with Applicable Law...................19
3.13 Certain Contracts................................20
3.14 Properties and Insurance.........................21
3.15 Minute Books.....................................21
3.16 Environmental Matters............................22
3.17 Reserves.........................................23
3.18 No Parachute Payments............................23
3.19 Agreements with Bank Regulators..................23
3.20 Disclosure.......................................23
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF HUBCO........................24
4.1 Corporate Organization...........................24
4.2 Capitalization...................................25
4.3 Authority; No Violation..........................25
4.4 Financial Statements.............................26
4.5 Broker's and Other Fees..........................27
4.6 Absence of Certain Changes or Events.............27
4.7 Legal Proceedings................................28
4.8 Tax Returns......................................28
4.9 Employee Benefit Plans...........................29
4.10 Reports..........................................30
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4.11 HUBCO Information................................31
4.12 Compliance With Applicable Law...................31
4.13 Contracts........................................31
4.14 Properties and Insurance.........................32
4.15 Funding and Capital Adequacy.....................32
4.16 Environmental Matters............................33
4.17 Reserves.........................................33
4.18 HUBCO Stock......................................33
4.19 Agreements with Bank Regulators..................34
4.20 Disclosure.......................................34
ARTICLE V - COVENANTS OF THE PARTIES........................................34
5.1 Conduct of the Business of WBI...................34
5.2 Negative Covenants...............................34
5.3 No Solicitation..................................36
5.4 Current Information..............................37
5.5 Access to Properties and Records;
Confidentiality..................................37
5.6 Regulatory Matters...............................38
5.7 Approval of Stockholders.........................41
5.8 Further Assurances...............................41
5.9 Public Announcements.............................42
5.10 Failure to Fulfill Conditions....................43
5.11 Employee Matters.................................43
5.12 Disclosure Supplements...........................43
5.13 Transaction Expenses of WBI and HUBCO............43
5.14 Indemnification. ...............................44
5.15 Bank Merger......................................46
5.16 Compliance with Antitrust Laws...................46
5.17 Pooling and Tax-Free Reorganization Treatment....47
5.18 Comfort Letters..................................47
5.19 Affiliates.......................................47
5.20 Appointments.....................................48
ARTICLE VI - CLOSING CONDITIONS.............................................48
6.1 Conditions to Each Party's Obligations Under
this Agreement...................................48
6.2 Conditions to the Obligations of HUBCO Under
this Agreement...................................50
6.3 Conditions to the Obligations of WBI Under
this Agreement...................................51
ARTICLE VII - TERMINATION, AMENDMENT AND WAIVER.............................53
7.1 Termination......................................53
7.2 Effect of Termination............................55
7.3 Amendment........................................55
7.4 Extension; Waiver................................56
ARTICLE VIII - MISCELLANEOUS................................................56
8.1 Expenses.........................................56
8.2 Survival.........................................57
8.3 Notices..........................................57
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8.4 Parties in Interest; Assignability...............58
8.5 Entire Agreement.................................58
8.6 Counterparts.....................................58
8.7 Governing Law....................................59
8.8 Descriptive Headings.............................59
8.9 Knowledge........................................59
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated June 21, 1996 (this
"Agreement"), is among HUBCO, Inc. ("HUBCO"), a New Jersey corporation and
registered bank holding company, Westport Bancorp, Inc., a Delaware corporation
("WBI") and registered bank holding company, and The Westport Bank & Trust
Company, a Connecticut chartered bank and trust company, wholly owned by WBI
("Westport").
WHEREAS, the respective Boards of Directors of HUBCO and WBI
have each determined that it is in the best interests of HUBCO and WBI and their
respective stockholders for HUBCO to acquire WBI by (i) merging WBI with and
into HUBCO with HUBCO surviving and WBI shareholders receiving the consideration
hereinafter set forth, and (ii) in HUBCO's discretion, simultaneously with the
merger of WBI into HUBCO, by merging Westport with a Connecticut bank subsidiary
of HUBCO; and
WHEREAS, the respective Boards of Directors of WBI, HUBCO and
Westport have each duly adopted and approved this Agreement and the Board of
Directors of WBI has directed that it be submitted to WBI's shareholders for
approval; and
NOW, THEREFORE, intending to be legally bound, the parties
hereto hereby agree as follows:
ARTICLE I - THE MERGER
1.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as hereafter defined), WBI shall be merged
with and into HUBCO (the "Merger") in accordance the Delaware General
Corporation Law (the "DGCL") and the New Jersey Business Corporation Act (the
"NJBCA") and HUBCO shall be the surviving corporation (the "Surviving
Corporation").
1.2 Effect of the Merger. At the Effective Time, the Surviving
Corporation shall be considered the same business and corporate entity as each
of HUBCO and WBI and thereupon and thereafter, all the property, rights,
privileges, powers and franchises of each of HUBCO and WBI shall vest in the
Surviving Corporation and the Surviving Corporation shall be subject to and be
deemed to have assumed all of the debts, liabilities, obligations and duties of
each of HUBCO and WBI and shall have succeeded to all of each of their
relationships, as fully and to the same extent as if such property, rights,
privileges, powers, franchises, debts, liabilities, obligations, duties and
relationships had been originally acquired, incurred or entered into by the
Surviving Corporation. In addition, any reference to either of HUBCO and WBI in
any contract or document, whether executed or taking effect before or after the
Effective Time, shall be considered a reference to the Surviving Corporation if
not
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inconsistent with the other provisions of the contract or document; and any
pending action or other judicial proceeding to which either of HUBCO or WBI is a
party shall not be deemed to have abated or to have discontinued by reason of
the Merger, but may be prosecuted to final judgment, order or decree in the same
manner as if the Merger had not been made; or the Surviving Corporation may be
substituted as a party to such action or proceeding, and any judgment, order or
decree may be rendered for or against it that might have been rendered for or
against either of HUBCO or WBI if the Merger had not occurred.
1.3 Certificate of Incorporation. As of the Effective Time,
the certificate of incorporation of HUBCO shall be amended to fix the
preferences, limitations and relative rights of the series of HUBCO Preferred
Stock the shares of which are to be issued in the Merger pursuant to Article II
hereof. On or prior to the Effective Time, HUBCO shall deliver to the Secretary
of State of the State of New Jersey for filing, pursuant to Section 7-2 of the
NJBCA, a certificate of amendment, in form mutually acceptable to HUBCO and WBI
(the "Certificate of Amendment"), giving effect to the foregoing and containing
any other provisions with respect to the aforementioned series of HUBCO
Preferred Stock necessary to permit consummation of the Merger in accordance
with the terms of this Agreement. The certificate of incorporation of HUBCO, as
so amended, at the Effective Time shall be the certificate of incorporation of
the Surviving Corporation and shall not otherwise be amended by this Agreement
or the Merger but thereafter may be amended as provided by law.
1.4 By-laws. As of the Effective Time, the By-laws of HUBCO
shall be the By-laws of the Surviving Corporation until otherwise amended as
provided by law.
1.5 Directors and Officers. As of the Effective Time, the
directors of the Surviving Corporation shall be the directors of HUBCO
(including the two directors appointed pursuant to Section 6.3(f) hereof). As of
the Effective Time, the officers of the Surviving Corporation shall be the
officers of HUBCO.
1.6 Effective Time and Closing. The Merger shall become
effective (and be consummated) upon the later of the filing of certificates of
merger, in form and substance satisfactory to HUBCO and WBI, with the Secretary
of State of the State of New Jersey (the "New Jersey Certificate of Merger") and
with the Secretary of State of the State of Delaware (the "Delaware Certificate
of Merger"). The term "Effective Time" shall mean the close of business on the
first day when the certificates of merger in both New Jersey and Delaware have
been so filed. A closing (the "Closing") shall take place prior to the Effective
Time at 10:00 a.m., on a date mutually agreeable and as soon as practicable (but
in any event within five business days) following the receipt of all necessary
regulatory, governmental and shareholder approvals
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and consents and the expiration of all statutory waiting periods in respect
thereof and the satisfaction or waiver of all of the conditions to the
consummation of the Merger specified in Article VI hereof (other than the
delivery of certificates, opinions and other instruments and documents to be
delivered at the Closing) (the "Closing Date"), at the offices of Pitney,
Hardin, Kipp & Szuch, 200 Campus Drive, Florham Park, New Jersey, or at such
other place, time or date as HUBCO and WBI may mutually agree upon. Immediately
following the Closing, the New Jersey Certificate of Merger shall be filed with
the New Jersey Secretary of State and the Delaware Certificate of Merger shall
be filed with the Delaware Secretary of State.
1.7 The Bank Merger. At HUBCO's option, at the Effective Time,
and simultaneously with the Merger, Westport shall be merged (the "Bank Merger")
with HUBCO's principal Connecticut bank subsidiary (the "Connecticut Bank") or
with another subsidiary of HUBCO, if HUBCO has no Connecticut bank subsidiary at
the Effective Time, in accordance with the provisions of Section 36a-125 of the
Banking Law of Connecticut. If the Bank Merger is consummated, the directors of
the surviving bank (the "Surviving Bank") (or if the Bank Merger is not
consummated, the directors of Westport at the Effective Time) shall include
three persons designated by WBI and acceptable to HUBCO (which persons shall
include Michael H. Flynn and David A. Rosow, unless HUBCO and WBI shall agree in
writing to the contrary) and shall include one person designated by Josiah T.
Austin and acceptable to HUBCO. At HUBCO's option, at any time following the
execution of this Agreement, Westport shall, and HUBCO shall cause the
Connecticut Bank to, execute and deliver a merger agreement, in form and
substance reasonably satisfactory to the parties hereto, for delivery to the
Connecticut Commissioner of Banking (the "Connecticut Commissioner") and the
Federal Deposit Insurance Corporation (the "FDIC") for approval of the Bank
Merger, subject to consummation of the Merger.
ARTICLE II - CONVERSION OF WBI SHARES, OPTIONS AND WARRANTS
2.1 Conversion of WBI Stock. Each share of common stock, $.01
par value, of WBI ("WBI Common Stock"), issued and outstanding immediately prior
to the Effective Time, and each share of Series A Convertible Preferred Stock,
$.01 par value, of WBI ("WBI Preferred Stock" and, together with the WBI Common
Stock, "WBI Stock"), issued and outstanding immediately prior to the Effective
Time (other than Dissenting Shares as defined in Section 2.4) shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted as follows:
(a) Exchange of Stock; Exchange Ratio. Subject to
the provisions of this Section 2.1, each share of WBI Common Stock issued and
outstanding immediately prior to the Effective Time (excluding any treasury
shares and shares held by HUBCO) shall be
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converted at the Effective Time into the right to receive 0.3225 of a share (the
"Exchange Ratio") of common stock, no par value, of HUBCO ("HUBCO Common
Stock"). Subject to the provisions of this Section 2.1, each share of WBI
Preferred Stock issued and outstanding immediately prior to the Effective Time
(excluding any treasury shares, shares held by HUBCO and Dissenting Shares)
shall be converted at the Effective Time into the right to receive one share of
a newly created series of HUBCO Preferred Stock ("New HUBCO Preferred Stock"
and, together with the HUBCO Common Stock, the "HUBCO Stock") having terms (to
be set forth in the Certificate of Amendment) substantially identical to those
set forth on Exhibit 2.1(a) hereto.
(b) Cancellation of WBI Certificates. After the
Effective Time, all such shares of WBI Stock (other than those cancelled
pursuant to Section 2.1(d)) shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each
certificate previously evidencing any such shares (other than Dissenting Shares
and those cancelled pursuant to Section 2.1(d)) shall thereafter represent the
right to receive the Merger Consideration (as defined in Section 2.2(b)). The
holders of such certificates previously evidencing such shares of WBI Stock
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such shares of WBI Stock except as otherwise provided
herein or by law. Such certificates previously evidencing such shares of WBI
Stock (other than Dissenting Shares and those cancelled pursuant to Section
2.1(d)) shall be exchanged for certificates evidencing shares of HUBCO Common
Stock or New HUBCO Preferred Stock, as the case may be, issued pursuant to this
Article II, upon the surrender of such certificates in accordance with this
Article II. No fractional shares of HUBCO Common Stock shall be issued, and, in
lieu thereof, a cash payment shall be made pursuant to Section 2.2(e).
(c) Capital Changes. If between the date hereof and
the Effective Time the outstanding shares of HUBCO Common Stock shall have been
changed into a different number of shares or a different class, by reason of any
stock dividend, stock split, reclassification, recapitalization, merger,
combination or exchange of shares, the Exchange Ratio and the definition of
Closing Price (as set forth in Section 2.2(e)) shall be correspondingly adjusted
to reflect such stock dividend, stock split, reclassification, recapitalization,
merger, combination or exchange of shares.
(d) Treasury Shares. All shares of WBI Stock held
by WBI in its treasury or owned by HUBCO or by any of HUBCO's wholly-owned
subsidiaries, including Hudson United Bank ("HUBank") (other than shares held as
trustee or in a fiduciary capacity and shares held as collateral on or in lieu
of a debt previously contracted) immediately prior to the Effective Time shall
be cancelled.
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2.2 Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, HUBCO
shall deposit, or shall cause to be deposited, with HUBank, Trust Department, or
another bank or trust company designated by HUBCO and reasonably acceptable to
WBI (the "Exchange Agent"), for the benefit of the holders of shares of WBI
Stock, for exchange in accordance with this Article II, through the Exchange
Agent, certificates evidencing shares of HUBCO Stock and cash in such amount
such that the Exchange Agent possesses such number of shares of HUBCO Stock and
such amount of cash as are required to provide all of the consideration required
to be exchanged by HUBCO pursuant to the provisions of this Article II (such
certificates for shares of HUBCO Stock, together with any dividends or
distributions with respect thereto, and cash being hereinafter referred to as
the "Exchange Fund"). The Exchange Agent shall, pursuant to irrevocable
instructions, deliver the HUBCO Stock and cash out of the Exchange Fund in
accordance with Section 2.1. Except as contemplated by Section 2.2(f) hereof,
the Exchange Fund shall not be used for any other purpose.
(b) Exchange Procedures. As soon as reasonably
practicable either before or after the Effective Time, HUBCO will instruct the
Exchange Agent to mail to each holder of record of a certificate or certificates
which immediately prior to the Effective Time evidenced outstanding shares of
WBI Stock (other than Dissenting Shares) (the "Certificates"), (i) a letter of
transmittal (the form and substance of which is reasonably agreed to by HUBCO
and WBI prior to the Effective Time and which shall specify that delivery shall
be effected, and risk of loss and title to the Certificates shall pass, only
upon proper delivery of the Certificates to the Exchange Agent and which shall
have such other provisions as HUBCO may reasonably specify) and (ii)
instructions for effecting the surrender of the Certificates in exchange for
certificates evidencing shares of HUBCO Stock. Upon surrender of a Certificate
for cancellation to the Exchange Agent together with such letter of transmittal,
duly executed, and such other customary documents as may be required pursuant to
such instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor (A) if the Certificate formerly represented WBI Common
Stock, then (x) certificates evidencing that number of whole shares of HUBCO
Common Stock which such holder has the right to receive in respect of the shares
of WBI Common Stock formerly evidenced by such Certificate in accordance with
Section 2.1 and (y) cash in lieu of fractional shares of HUBCO Common Stock to
which such holder may be entitled pursuant to Section 2.2(e), and (B) if the
Certificate formerly represented WBI Preferred Stock, then certificates
evidencing that number of whole or partial shares of New HUBCO Preferred Stock
which such holder has the right to receive in respect of the shares of WBI
Preferred Stock formerly evidenced by such Certificate in accordance with
Section 2.1 (the shares of HUBCO Stock and cash described in clauses (A) and (B)
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being collectively, the "Merger Consideration") and the Certificate so
surrendered shall forthwith be cancelled. In the event of a transfer of
ownership of shares of WBI Stock which is not registered in the transfer records
of WBI, a certificate evidencing the proper number of shares of HUBCO Stock
and/or cash may be issued and/or paid in accordance with this Article II to a
transferee if the Certificate evidencing such shares of WBI Stock is presented
to the Exchange Agent, accompanied by all documents required to evidence and
effect such transfer and by evidence that any applicable stock transfer taxes
have been paid. Until surrendered as contemplated by this Section 2.2, each
Certificate shall be deemed at any time after the Effective Time to evidence
only the right to receive upon such surrender the Merger Consideration. HUBCO
shall establish appropriate procedures that will enable holders of unexchanged
stock certificates of WBI's predecessors (which certificates represent shares
of, or the right to receive shares of, WBI Stock) to directly exchange such
certificates for the Merger Consideration.
(c) Distributions with Respect to Unexchanged
Shares of HUBCO Stock. No dividends or other distributions declared or made
after the Effective Time with respect to HUBCO Stock with a record date after
the Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the shares of HUBCO Stock evidenced thereby, and no other part
of the Merger Consideration shall be paid to any such holder, until the holder
of such Certificate shall surrender such Certificate (or a suitable affidavit of
loss and customary bond). Subject to the effect of applicable laws, following
surrender of any such Certificate, there shall be paid to the holder of the
certificates evidencing shares of HUBCO Stock issued in exchange therefor,
without interest, (i) promptly, the amount of any cash payable with respect to a
fractional share of HUBCO Stock to which such holder may have been entitled
pursuant to Section 2.2(e) and the amount of dividends or other distributions
with a record date on or after the Effective Time theretofore paid with respect
to such shares of HUBCO Stock, and (ii) at the appropriate payment date, the
amount of dividends or other distributions, with a record date on or after the
Effective Time but prior to surrender and a payment date occurring after
surrender, payable with respect to such shares of HUBCO Stock.
(d) No Further Rights in WBI Stock. All shares of
HUBCO Stock issued and cash paid upon conversion of the shares of WBI Stock in
accordance with the terms hereof shall be deemed to have been issued or paid in
full satisfaction of all rights pertaining to such shares of WBI Stock.
(e) No Fractional Shares of HUBCO Common Stock. No
certificates or scrip evidencing fractional shares of HUBCO Common Stock shall
be issued upon the surrender for exchange of Certificates and such fractional
share interests will not entitle
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the owner thereof to vote or to any rights of a stockholder of HUBCO. Cash shall
be paid in lieu of fractional shares of HUBCO Common Stock, based upon the
Median Pre-Closing Price (as hereinafter defined) of HUBCO Common Stock.
The "Median Pre-Closing Price" of HUBCO Common
Stock shall mean the Median Price (as hereinafter defined) calculated based upon
the Closing Price (as hereinafter defined) of HUBCO Common Stock during the
first 20 of the 25 consecutive trading days immediately preceding the date of
the Closing. The "Closing Price" shall mean the closing price of HUBCO Common
Stock as supplied by the National Association of Securities Dealers Automated
Quotations System ("NASDAQ") and published in The Wall Street Journal during the
first 20 of the 25 consecutive trading days immediately preceding the date of
the Closing. The "Median Price" shall be determined by taking the price half-way
between the Closing Prices left after discarding the 9 lowest and 9 highest
Closing Prices in the 20 day period. A trading day shall mean a day for which a
Closing Price is so supplied and published.
(f) Termination of Exchange Fund. Any portion of
the Exchange Fund which remains undistributed to the holders of WBI Stock for
two years after the Effective Time shall be delivered to HUBCO, upon demand, and
any holders of WBI Stock who have not theretofore complied with this Article II
shall thereafter look only to HUBCO for the Merger Consideration, dividends and
distributions to which they are entitled.
(g) No Liability. Neither HUBCO nor HUBank shall be
liable to any holder of shares of WBI Stock for any such shares of HUBCO Stock
or cash (or dividends or distributions with respect thereto) delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
(h) Withholding Rights. HUBCO shall be entitled to
deduct and withhold, or cause the Exchange Agent to deduct and withhold, from
funds provided by the holder or from the consideration otherwise payable
pursuant to this Agreement to any holder of WBI Stock Options (as defined in
Section 3.2), the minimum amounts (if any) that HUBCO is required to deduct and
withhold with respect to the making of such payment under the Code (as defined
in Section 3.8), or any provision of state, local or foreign tax law. To the
extent that amounts are so withheld by HUBCO, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
the WBI Stock Options in respect of which such deduction and withholding was
made by HUBCO.
2.3 Stock Transfer Books. At the Effective Time, the stock
transfer books of WBI shall be closed and there shall be no further registration
of transfers of shares of WBI Stock thereafter on the records of WBI. On or
after the Effective Time, any
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Certificates presented to the Exchange Agent or HUBCO for transfer shall be
converted into the Merger Consideration.
2.4 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, any holder of WBI Preferred Stock shall have the
right to dissent in the manner provided in Section 262 of the DGCL, and if all
necessary requirements of the DGCL are met, such shares shall be entitled to
payment of the fair value of such shares in accordance with the provisions of
the DGCL ("Dissenting Shares"), provided, however, that (i) if any holder of
Dissenting Shares shall subsequently withdraw such holder's demand for appraisal
of such shares within 60 days of the Effective Time, or, with the written
consent of the Surviving Corporation, any time thereafter, or (ii) if any holder
fails to follow the procedures for establishing such holder's entitlement to
appraisal rights as provided in the DGCL, the right to appraisal of such shares
shall be forfeited and such shares shall thereupon be deemed to have been
converted into the right to receive and to have become exchangeable for, as of
the Effective Time, the Merger Consideration.
2.5 WBI Stock Options.
(a) Converting Stock Options. Stock Options (as
defined in Section 3.2) which, as of the Effective Time, are outstanding and
fully vested and exercisable as to all of the shares of WBI Common Stock that
are subject to such option (including options that become exercisable as a
result of the transactions contemplated by this Agreement) (each, a "Vested
Stock Option"), shall be converted at the Effective Time into HUBCO Common Stock
in accordance with the formula set forth below, to the extent permitted under
the WBI Stock Option Plans (as defined in Section 3.2) and the agreements
pursuant to which such Vested Stock Options were granted (each, an "Option Grant
Agreement"). Each Vested Stock Option to be so converted is referred to herein
as a "Converting Stock Option." If conversion of any Vested Stock Option would
not be permitted under the related WBI Stock Option Plan or Option Grant
Agreement without the consent of the optionee affected thereby, WBI, in
consultation with HUBCO, shall use its reasonable best efforts to obtain the
consent of the necessary parties to amend the related WBI Stock Option Plan or
Option Grant Agreement or both, as necessary, to permit such conversion, and to
cause Vested Stock Options outstatnding at the Effective Time to be Converting
Stock Options.
(i) Each outstanding Converting Stock
Option shall be valued on the basis of the Median Pre- Closing
Price of HUBCO Common Stock (as defined in Section 2.2(e))
multiplied by the Exchange Ratio and subtracting the stated
exercise price for each Converting Stock Option from the
product therefrom (the "Option Value"), and
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(ii) Each holder of Converting Stock
Options shall receive at the Effective Time, a number of
shares of HUBCO Common Stock equal to the aggregate Option
Value for all of such holder's Converting Stock Options,
divided by the Median Pre-Closing Price of HUBCO Common Stock.
(iii) Cash shall be paid in lieu of
fractional shares, based upon the Median Pre-Closing Price of
HUBCO Common Stock.
(b) Continuing Stock Options. Each Stock Option
outstanding at the Effective Time (i) which is not a Vested Stock Option or (ii)
which is a Vested Stock Option and which is not a Converting Stock Option (each
of the foregoing, a "Continuing Stock Option") shall be converted into an option
to purchase HUBCO Common Stock, wherein (i) the right to purchase shares of WBI
Common Stock pursuant to the Continuing Stock Option shall be converted into the
right to purchase that same number of shares of HUBCO Common Stock multiplied by
the Exchange Ratio, (ii) the option exercise price per share of HUBCO Common
Stock shall be the previous option exercise price per share of the WBI Common
Stock divided by the Exchange Ratio, and (iii) in all other material respects
the option shall be subject to the same terms and conditions as governed the
Continuing Stock Option on which it was based, including the length of time
within which the option may be exercised (which shall not be extended) and for
all Continuing Stock Options, such adjustments shall be and are intended to be
effected in a manner which is consistent with Section 424(a) of the Code (as
defined in Section 3.2 hereof). Shares of HUBCO Common Stock issuable upon
exercise of Continuing Stock Options shall be covered by an effective
registration statement on Form S-8, and HUBCO shall use its reasonable best
efforts to file a registration statement on Form S-8 covering such shares as
soon as possible after the Effective Time.
2.6 WBI Warrants. At the Effective Time, HUBCO shall expressly
assume the due and punctual performance of each and every covenant and condition
to be performed and observed by WBI, and all the obligations of WBI, under each
Warrant which evidences the right to purchase a number of shares of WBI Common
Stock and which is outstanding at the Effective Time (each, a "WBI Warrant").
Each WBI Warrant automatically shall be converted, without further action on the
part of the holder, into a like warrant (each an "HUBCO Warrant") to purchase
for the same aggregate purchase price that number of shares of HUBCO Common
Stock which equals the number of shares of WBI Common Stock which may be
purchased under the WBI Warrant multiplied by the Exchange Ratio, and such HUBCO
Warrant shall thereafter be subject to the same terms and conditions as
specified in the WBI Warrant. Following the Effective Time, any transferee of
the Warrant Certificate shall receive in exchange for any old Warrant
Certificate a new HUBCO Warrant Certificate
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evidencing the right to purchase HUBCO Common Stock. Unless requested by a
holder of an outstanding WBI Warrant, HUBCO shall not be required to issue new
Certificates evidencing the Warrant to purchase HUBCO Common Stock but the old
WBI Warrant certificates shall continue to evidence such rights until exchanged,
transferred or exercised.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF WBI
References herein to "WBI Disclosure Schedule" shall mean all
of the disclosure schedules required by this Article III, dated as of the date
hereof and referenced to the specific sections and subsections of Article III of
this Agreement, which have been delivered on the date hereof by WBI to HUBCO.
WBI hereby represents and warrants to HUBCO as follows:
3.1 Corporate Organization.
(a) WBI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. WBI has
the corporate power and authority to own or lease all of its properties and
assets and to carry on its business as it is now being conducted, and is duly
licensed or qualified to do business and is in good standing in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed, qualified or in good standing would not have a material adverse effect
on the business, operations, assets or financial condition of WBI and the WBI
Subsidiaries (as defined below), taken as a whole. WBI is registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended (the
"BHCA").
(b) Westport and NYLF Corp. are the only current
WBI Subsidiaries. For purposes of this Agreement, the term "WBI Subsidiary"
means any corporation, partnership, joint venture or other legal entity in which
WBI, directly or indirectly, owns at least a 50% stock or other equity interest
or for which WBI, directly or indirectly, acts as a general partner, provided
that to the extent that any representation or warranty set forth herein covers a
period of time prior to the date of this Agreement, the term "WBI Subsidiary"
shall include any entity which was an WBI Subsidiary at any time during such
period. Westport is a state-chartered bank and trust company duly organized and
validly existing in stock form and in good standing under the laws of the State
of Connecticut. All eligible accounts of depositors issued by Westport are
insured by the Bank Insurance Fund of the FDIC to the fullest extent permitted
by law. NYLF Corp. is a corporation duly organized and in active status under
the laws of the State of Connecticut. Each WBI Subsidiary has the corporate
power and
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authority to own or lease all of its properties and assets and to carry on its
business as it is now being conducted and is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed, qualified or in good standing would
not have a material adverse effect on the business, operations, assets or
financial condition of WBI and the WBI Subsidiaries, taken as a whole.
(c) The WBI Disclosure Schedule sets forth true and
complete copies of the Certificate of Incorporation and Bylaws, as in effect on
the date hereof, of WBI, Westport and NYLF.
3.2 Capitalization. The authorized capital stock of WBI
consists of 20,500,000 shares of WBI Common Stock and 2,000,000 shares of WBI
Preferred Stock. As of June 18, 1996, there were 5,743,531 shares of WBI Common
Stock issued and outstanding and 39,600 shares of WBI Preferred Stock issued and
outstanding. As of June 18, 1996, there were 1,034,721 shares of WBI Common
Stock issuable upon exercise of outstanding stock options. The WBI Disclosure
Schedule sets forth (i) all options which may be exercised for issuance of WBI
Common Stock (collectively, the "Stock Options") and the terms upon which the
options may be exercised, (ii) true and complete copies of each plan and a
specimen of each form of agreement pursuant to which any outstanding Stock
Option was granted, including a list of each outstanding Stock Option issued
pursuant thereto, (iii) all WBI Warrants and the terms upon which the WBI
Warrants may be exercised, and (iv) a specimen of each form of agreement
pursuant to which any WBI Warrant was granted. All issued and outstanding shares
of WBI Stock, and all issued and outstanding shares of capital stock of each WBI
Subsidiary, have been duly authorized and validly issued, are fully paid, and
nonassessable. The authorized capital stock of Westport is as set forth in the
charter documents of Westport contained in Section 3.1 of the WBI Disclosure
Schedule. All of the outstanding shares of capital stock of each WBI Subsidiary
are owned (directly in the case of Westport, and indirectly in the case of NYLF
Corp.) by WBI and are free and clear of any liens, encumbrances, charges,
restrictions or rights of third parties. Except for the Stock Options and the
WBI Warrants issued and disclosed herein, neither WBI nor Westport has granted
nor is bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the transfer, purchase,
subscription or issuance of any shares of capital stock of WBI or Westport or
any securities representing the right to purchase, subscribe or otherwise
receive any shares of such capital stock or any securities convertible into any
such shares, and there are no agreements or understandings with respect to
voting of any such shares.
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3.3 Authority; No Violation.
(a) Subject to the approval of this Agreement and
the transactions contemplated hereby by all applicable regulatory authorities
and by the stockholders of WBI, and except as set forth in Section 3.3 of the
WBI Disclosure Schedule, WBI and Westport have the full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby in accordance with the terms hereof. The
execution and delivery of this Agreement and, except as set forth in Section 3.3
of the WBI Disclosure Schedule, the consummation of the transactions
contemplated hereby have been duly and validly approved by all of the directors
of WBI and Westport in accordance with their respective Certificates of
Incorporation and applicable laws and regulations. Except for such approvals,
and except as set forth in Section 3.3 of the WBI Disclosure Schedule, no other
corporate proceedings not otherwise contemplated hereby on the part of WBI or
Westport are necessary to consummate the transactions so contemplated. This
Agreement has been duly and validly executed and delivered by WBI and Westport,
and constitutes the valid and binding obligation of each of WBI and Westport,
enforceable against WBI and Westport in accordance with its terms.
(b) Neither the execution and delivery of this
Agreement by WBI or Westport, nor the consummation by WBI or Westport of the
transactions contemplated hereby in accordance with the terms hereof, or
compliance by WBI or Westport with any of the terms or provisions hereof, will
(i) violate any provision of WBI's or Westport's Certificate of Incorporation or
By-laws, (ii) assuming that the consents and approvals set forth below are duly
obtained, violate any statute, code, ordinance, rule, regulation, judgment,
order, writ, decree or injunction applicable to WBI, Westport or any of their
respective properties or assets, or (iii) except as set forth in the WBI
Disclosure Schedule, violate, conflict with, result in a breach of any
provisions of, constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, result in the termination of,
accelerate the performance required by, or result in the creation of any lien,
security interest, charge or other encumbrance upon any of the respective
properties or assets of WBI or Westport under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which WBI or Westport is a
party, or by which they or any of their respective properties or assets may be
bound or affected except, with respect to (ii) and (iii) above, such as
individually or in the aggregate will not have a material adverse effect on the
business, operations, assets or financial condition of WBI and the WBI
Subsidiaries, taken as a whole, and which will not prevent or materially delay
the consummation of the transactions contemplated hereby. Except for consents
and approvals of or filings or registrations with or notices to the Board of
Governors of the
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Federal Reserve System (the "FRB"), the FDIC, the Connecticut Commissioner, the
Connecticut Department of Environmental Protection (the "DEP"), the Securities
and Exchange Commission (the "SEC"), other applicable government authorities,
the stockholders of WBI, no consents or approvals of or filings or registrations
with or notices to any third party or any public body or authority are necessary
on behalf of WBI or Westport in connection with (x) the execution and delivery
by WBI and Westport of this Agreement and (y) the consummation by WBI of the
Merger, the consummation by Westport of the Bank Merger, if any, and the
consummation by WBI and Westport of the other transactions contemplated hereby,
except (i) such as are listed in the WBI Disclosure Schedule and (ii) such as
individually or in the aggregate will not (if not obtained) have a material
adverse effect on the business, operations, assets or financial condition of WBI
and the WBI Subsidiaries taken as a whole or prevent or materially delay the
consummation of the transactions contemplated hereby. To the best of WBI's
knowledge, no fact or condition exists which WBI has reason to believe will
prevent it from obtaining the aforementioned consents and approvals.
3.4 Financial Statements.
(a) The WBI Disclosure Schedule sets forth copies
of the consolidated balance sheets of WBI as of December 31, 1994 and 1995, and
the related consolidated statements of income, changes in stockholders' equity
and cash flows for the periods ended December 31, in each of the three years
1993 through 1995, in each case accompanied by the audit report of Arthur
Andersen LLP ("Arthur Andersen"), independent public accountants with respect to
WBI, and the unaudited consolidated statement of condition of WBI as of March
31, 1996 and the related unaudited statements of income and cash flows for the
three months ended March 31, 1996 and 1995, as reported in WBI's Quarterly
Report on Form 10-Q, filed with the SEC (collectively, the "WBI Financial
Statements"). The WBI Financial Statements (including the related notes) have
been prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied during the periods involved (except as may be
indicated therein or in the notes thereto and except for the omission of notes
from interim financial statements), and fairly present the consolidated
financial condition of WBI as of the respective dates set forth therein, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows fairly present the results of the consolidated operations, changes in
stockholders' equity and cash flows of WBI for the respective periods set forth
therein.
(b) The books and records of WBI and Westport are
being maintained in material compliance with applicable legal and accounting
requirements.
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(c) Except as and to the extent reflected,
disclosed or reserved against in the WBI Financial Statements (including the
notes thereto), as of March 31, 1996, or except as set forth in Section 3.4 of
the WBI Disclosure Schedule, neither WBI nor any WBI Subsidiary had any
liabilities, whether absolute, accrued, contingent or otherwise, material to the
business, operations, assets or financial condition of WBI and the WBI
Subsidiaries, taken as a whole, which were required by GAAP (consistently
applied) to be disclosed in WBI's consolidated statement of condition as of
March 31, 1996 or the notes thereto. Since March 31, 1996, WBI and Westport have
not incurred any liabilities except in the ordinary course of business and
consistent with prudent banking practice, except as related to the transactions
contemplated by this Agreement or except as set forth in the WBI Disclosure
Schedule.
3.5 Broker's and Other Fees. Except for Ostrowski & Company,
Inc. ("O & Co."), neither WBI or Westport nor any of their directors or officers
has employed any broker or finder or incurred any liability for any broker's or
finder's fees or commissions in connection with any of the transactions
contemplated by this Agreement. The agreement with O & Co. is set forth in the
WBI Disclosure Schedule. Other than pursuant to the agreement with O & Co.,
there are no fees (other than time charges billed at usual and customary rates)
payable to any consultants, including lawyers and accountants, in connection
with this transaction or which would be triggered by consummation of this
transaction or the termination of the services of such consultants by WBI or
Westport.
3.6 Absence of Certain Changes or Events.
(a) Except as disclosed in the WBI Disclosure
Schedule, there has not been any material adverse change in the business,
operations, assets or financial condition of WBI and the WBI Subsidiaries, taken
as a whole, since March 31, 1996, and to the best of WBI's knowledge, no fact or
condition exists which WBI believes will cause such a material adverse change in
the future.
(b) Except as set forth in the WBI Disclosure
Schedule, neither WBI nor Westport has taken or permitted any of the actions set
forth in Section 5.2 hereof between March 31, 1996 and the date hereof and,
except for execution of this Agreement and the other documents contemplated
hereby, WBI has conducted its business only in the ordinary course, consistent
with past practice.
3.7 Legal Proceedings. Except as disclosed in the WBI
Disclosure Schedule, and except for ordinary routine litigation incidental to
the business of WBI and the WBI Subsidiaries, neither WBI nor any WBI Subsidiary
is a party to any, and there are no pending or, to the best of WBI's knowledge,
threatened legal, administrative, arbitral or other proceedings, claims, actions
or
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governmental investigations of any nature against WBI or any WBI Subsidiary
which, if decided adversely to WBI or an WBI Subsidiary, are reasonably likely
to have a material adverse effect on the business, operations, assets or
financial condition of WBI and the WBI Subsidiaries taken as a whole. Except as
disclosed in the WBI Disclosure Schedule, neither WBI nor any WBI Subsidiary is
a party to any order, judgment or decree entered in any lawsuit or proceeding
which is material to WBI or such WBI Subsidiary.
3.8 Taxes and Tax Returns. Except as disclosed in the WBI
Disclosure Schedule:
(a) WBI and each WBI Subsidiary has duly filed (and
until the Effective Time will so file) all returns, declarations, reports,
information returns and statements ("Returns") required to be filed by it on or
before the Effective Time in respect of any federal, state and local taxes
(including withholding taxes, penalties or other payments required) and has duly
paid (and until the Effective Time will so pay) all such taxes due and payable,
other than taxes or other charges which are being contested in good faith (and
disclosed to HUBCO in writing) or against which reserves have been established.
WBI and each WBI Subsidiary has established (and until the Effective Time will
establish) on its books and records reserves that are adequate for the payment
of all federal, state and local taxes not yet due and payable, but are incurred
in respect of WBI or such WBI Subsidiary through such date. None of the federal
or state income tax returns of WBI or any WBI Subsidiary have been examined by
the Internal Revenue Service (the "IRS") or the Connecticut Division of Taxation
within the past six years. To the best knowledge of WBI, there are no audits or
other administrative or court proceedings presently pending nor any other
disputes pending with respect to, or claims asserted for, taxes or assessments
upon WBI or any WBI Subsidiary, nor has WBI or any WBI Subsidiary given any
currently outstanding waivers or comparable consents regarding the application
of the statute of limitations with respect to any taxes or Returns.
(b) Neither WBI nor any WBI Subsidiary (i) has
requested any extension of time within which to file any Return, which Return
has not since been filed, (ii) is a party to any agreement providing for the
allocation or sharing of taxes, (iii) is required to include in income any
adjustment pursuant to Section 481(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), by reason of a voluntary change in accounting method
initiated by WBI or such WBI Subsidiary (nor does WBI have any knowledge that
the IRS has proposed any such adjustment or change of accounting method), or
(iv) has filed a consent pursuant to Section 341(f) of the Code or agreed to
have Section 341(f)(2) of the Code apply.
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(c) From January 1, 1992 until the date hereof, to
the best of WBI's knowledge, there has been no "ownership change" of WBI as
defined in Section 382(g) of the Code.
3.9 Employee, Director and Officer Benefit Plans.
(a) Except as set forth on the WBI Disclosure
Schedule, neither WBI nor any WBI Subsidiary maintains or contributes to any
"employee pension benefit plan" (the "WBI Pension Plans") within the meaning of
Section 3 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), "employee welfare benefit plan" (the "WBI Welfare Plans") within the
meaning of Section 3 of ERISA, stock option plan, stock purchase plan, deferred
compensation plan, severance plan, bonus plan, employment agreement, director
retirement program or other similar plan, program or arrangement. Neither WBI
nor any WBI Subsidiary has, since September 2, 1974, contributed to any
"Multiemployer Plan," as such term is defined in Section 3(37) of ERISA.
(b) WBI has delivered to HUBCO in the WBI
Disclosure Schedules (or previously made available to HUBCO) a complete and
accurate copy of each of the following with respect to each of the WBI Pension
Plans and WBI Welfare Plans, if any: (i) plan document, summary plan
description, and summary of material modifications (if not available, a detailed
description of the foregoing); (ii) trust agreement or insurance contract, if
any; (iii) most recent IRS determination letter, if any; (iv) most recent
actuarial report, if any; and (v) most recent annual report on Form 5500.
(c) The present value of all accrued benefits, both
vested and non-vested, under each of the WBI Pension Plans subject to Title IV
of ERISA, based upon the actuarial assumptions used for funding purposes in the
most recent actuarial valuation prepared by such WBI Pension Plan's actuary, did
not exceed the then current value of the assets of such plans allocable to such
accrued benefits. To the best of WBI's knowledge, the actuarial assumptions then
utilized for such plans were reasonable and appropriate as of the last valuation
date and reflect then current market conditions.
(d) During the last six years, the Pension Benefit
Guaranty Corporation ("PBGC") has not asserted any claim for liability against
WBI or any WBI Subsidiary which has not been paid in full.
(e) All premiums (and interest charges and penal-
ties for late payment, if applicable) due to the PBGC with respect to each WBI
Pension Plan have been paid. All contributions required to be made to each WBI
Pension Plan under the terms thereof, ERISA or other applicable law have been
timely made, and
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all amounts properly accrued to date as liabilities of WBI which have not been
paid have been properly recorded on the books of WBI.
(f) Except as disclosed in the WBI Disclosure
Schedule, each of the WBI Pension Plans, WBI Welfare Plans and each other
employee benefit plan and arrangement identified on the WBI Disclosure Schedule
has been operated in compliance in all material respects with the provisions of
ERISA, the Code, all regulations, rulings and announcements promulgated or
issued thereunder, and all other applicable governmental laws and regulations.
Furthermore, except as disclosed in the WBI Disclosure Schedule, if WBI
maintains any WBI Pension Plan, WBI has received or applied for a favorable
determination letter from the IRS which takes into account the Tax Reform Act of
1986 and subsequent legislation, and WBI is not aware of any fact or
circumstance which would disqualify any plan.
(g) To the best knowledge of WBI, no non-exempt
prohibited transaction, within the meaning of Section 4975 of the Code or
Section 406 of ERISA, has occurred with respect to any WBI Welfare Plan or WBI
Pension Plan that would result in any material tax or penalty for WBI or any WBI
Subsidiary.
(h) No WBI Pension Plan or any trust created
thereunder has been terminated, nor have there been any "reportable events"
(notice of which has not been waived by the PBGC), within the meaning of Section
4034(b) of ERISA, with respect to any WBI Pension Plan.
(i) No "accumulated funding deficiency," within the
meaning of Section 412 of the Code, has been incurred with respect to any WBI
Pension Plan.
(j) There are no material pending, or, to the best
knowledge of WBI, material threatened or anticipated claims (other than routine
claims for benefits) by, on behalf of, or against any of the WBI Pension Plans
or the WBI Welfare Plans, any trusts created thereunder or any other plan or
arrangement identified in the WBI Disclosure Schedule.
(k) Except as disclosed in the WBI Disclosure
Schedule, no WBI Pension Plan or WBI Welfare Plan provides medical or death
benefits (whether or not insured) beyond an employee's retirement or other
termination of service, other than (i) coverage mandated by law or pursuant to
conversion or continuation rights set out in such Plan or an insurance policy
providing benefits thereunder, or (ii) death benefits under any WBI Pension
Plan.
(l) Except with respect to customary health, life
and disability benefits, there are no unfunded benefit obligations which are not
accounted for by reserves shown on the WBI Financial
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Statements and established under GAAP or otherwise noted on such Financial
Statements.
(m) With respect to each WBI Pension Plan and WBI
Welfare Plan that is funded wholly or partially through an insurance policy,
there will be no liability of WBI or any WBI Subsidiary as of the Effective Time
under any such insurance policy or ancillary agreement with respect to such
insurance policy in the nature of a retroactive rate adjustment, loss sharing
arrangement or other actual or contingent liability arising wholly or partially
out of events occurring prior to the Effective Time.
(n) Except (i) for payments and other benefits due
pursuant to the employment agreements included within the WBI Disclosure
Schedule, and (ii) as set forth in Section 3.9(n) of the WBI Disclosure
Schedule, or as expressly agreed to by HUBCO in writing either pursuant to this
Agreement or otherwise, the consummation of the transactions contemplated by
this Agreement will not (x) entitle any current or former employee of WBI or any
WBI Subsidiary to severance pay, unemployment compensation or any similar
payment, or (y) accelerate the time of payment or vesting, or increase the
amount of any compensation or benefits due to any current or former employee
under any WBI Pension Plan or WBI Welfare Plan.
(o) Except for the WBI Pension Plans and the WBI
Welfare Plans, and except as set forth on the WBI Disclosure Schedule, WBI has
no deferred compensation agreements, understandings or obligations for payments
or benefits to any current or former director, officer or employee of WBI or any
WBI Subsidiary or any predecessor of any thereof. The WBI Disclosure Schedule
sets forth (or lists, if previously delivered to HUBCO): (i) true and complete
copies of the agreements, understandings or obligations with respect to each
such current or former director, officer or employee, and (ii) the most recent
actuarial or other calculation of the present value of such payments or
benefits.
(p) Except as set forth in the WBI Disclosure
Schedule, WBI does not maintain or otherwise pay for life insurance policies
(other than group term life policies on employees) with respect to any director,
officer or employee. The WBI Disclosure Schedule lists each such insurance
policy and any agreement with a party other than the insurer with respect to the
payment, funding or assignment of such policy. To the best of WBI's knowledge,
neither WBI nor any WBI Pension Plan or WBI Welfare Plan owns any individual or
group insurance policies issued by an insurer which has been found to be
insolvent or is in rehabilitation pursuant to a state proceeding.
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3.10 Reports.
(a) The WBI Disclosure Schedule lists, and as to
item (i) below WBI has previously delivered to HUBCO a complete copy of, each
(i) final registration statement, prospectus, annual, quarterly or special
report and definitive proxy statement filed by WBI since January 1, 1994
pursuant to the Securities Act of 1933, as amended (the "1933 Act"), or the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and (ii)
communication (other than general advertising materials and press releases)
mailed by WBI to its stockholders as a class since January 1, 1994, and each
such communication, as of its date, complied in all material respects with all
applicable statutes, rules and regulations and did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading; provided
that information as of a later date shall be deemed to modify information as of
an earlier date.
(b) Since January 1, 1994, (i) WBI has filed all
reports that it was required to file with the SEC under the 1934 Act, and (ii)
WBI and Westport each has duly filed all material forms, reports and documents
which they were required to file with each agency charged with regulating any
aspect of their business, in each case in form which was correct in all material
respects, and, subject to permission from such regulatory authorities, WBI
promptly will deliver or make available to HUBCO accurate and complete copies of
such reports. As of their respective dates, each such form, report, or document,
and each such final registration statement, prospectus, annual, quarterly or
special report, definitive proxy statement or communication, complied in all
material respects with all applicable statutes, rules and regulations and did
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading; provided that information contained in any such document
as of a later date shall be deemed to modify information as of an earlier date.
The WBI Disclosure Schedule lists the dates of all examinations of WBI or
Westport conducted by either the FRB, the FDIC or the Connecticut Commissioner
since January 1, 1994 and the dates of any responses thereto submitted by WBI or
Westport.
3.11 WBI and Westport Information. The information relating to
WBI and Westport, this Agreement, and the transactions contemplated hereby
(except for information relating solely to HUBCO) to be contained in the Proxy
Statement-Prospectus (as defined in Section 5.6(a) hereof) to be delivered to
stockholders of WBI in connection with the solicitation of their approval of the
Merger, as of the date the Proxy Statement is mailed to stockholders of WBI, and
up to and including the date of the
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meeting of stockholders to which such Proxy Statement-Prospectus relates, will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
3.12 Compliance with Applicable Law. Except as set forth in
the WBI Disclosure Schedule, WBI and each WBI Subsidiary holds all licenses,
franchises, permits and authorizations necessary for the lawful conduct of its
business and has complied with and is not in default in any respect under any
applicable law, statute, order, rule, regulation, policy and/or guideline of any
federal, state or local governmental authority relating to WBI or such WBI
Subsidiary (including, without limitation, consumer, community and fair lending
laws) (other than where the failure to have a license, franchise, permit or
authorization or where such default or noncompliance will not result in a
material adverse effect on the business, operations, assets or financial
condition of WBI and the WBI Subsidiaries taken as a whole), and WBI has not
received notice of violation of, and does not know of any violations of, any of
the above.
3.13 Certain Contracts.
(a) Except for plans referenced in Section 3.9 and
as disclosed in the WBI Disclosure Schedule, (i) neither WBI nor Westport is a
party to or bound by any written contract or any understanding with respect to
the employment of any officers, employees, directors or consultants, and (ii)
the consummation of the transactions contemplated by this Agreement will not
(either alone or upon the occurrence of any additional acts or events) result in
any payment (whether of severance pay or otherwise) becoming due from WBI or
Westport to any officer, employee, director or consultant thereof. The WBI
Disclosure Schedule lists, and either the WBI Disclosure Schedule sets forth
true and correct copies of or WBI has previously made available to HUBCO, all
severance or employment agreements with officers, directors, employees, agents
or consultants to which WBI or Westport is a party.
(b) Except as disclosed in the WBI Disclosure
Schedule and except for loan commitments, loan agreements and loan instruments
entered into or issued in the ordinary course of business, (i) as of the date of
this Agreement, neither WBI nor any WBI Subsidiary is a party to or bound by any
commitment, agreement or other instrument which is material to the business,
operations, assets or financial condition of WBI and the WBI Subsidiaries taken
as a whole, (ii) no commitment, agreement or other instrument to which WBI or
any WBI Subsidiary is a party or by which any of them is bound limits the
freedom of WBI or any WBI Subsidiary to compete in any line of business or with
any person, and (iii) neither WBI
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nor any WBI Subsidiary is a party to any collective bargaining agreement.
(c) Except as disclosed in the WBI Disclosure
Schedule, neither WBI nor any WBI Subsidiary or, to the best knowledge of WBI,
any other party thereto, is in default in any material respect under any
material lease, contract, mortgage, promissory note, deed of trust, loan or
other commitment (except those under which Westport is or will be the creditor)
or arrangement, except for defaults which individually or in the aggregate would
not have a material adverse effect on the business, operations, assets or
financial condition of WBI and the WBI Subsidiaries, taken as a whole.
3.14 Properties and Insurance.
(a) Except as set forth in the WBI Disclosure
Schedule, WBI or a WBI Subsidiary has good and, as to owned real property,
marketable title to all material assets and properties, whether real or
personal, tangible or intangible, reflected in WBI's consolidated balance sheet
as of December 31, 1995, or owned and acquired subsequent thereto (except to the
extent that such assets and properties have been disposed of for fair value in
the ordinary course of business since December 31, 1995), subject to no
encumbrances, liens, mortgages, security interests or pledges, except (i) those
items that secure liabilities that are reflected in said balance sheet or the
notes thereto or that secure liabilities incurred in the ordinary course of
business after the date of such balance sheet, (ii) statutory liens for amounts
not yet delinquent or which are being contested in good faith, (iii) such
encumbrances, liens, mortgages, security interests, pledges and title
imperfections that are not in the aggregate material to the business,
operations, assets, and financial condition of WBI and the WBI Subsidiaries
taken as a whole, and (iv) with respect to owned real property, title
imperfections noted in title reports delivered to HUBCO prior to the date
hereof. Except as affected by the transactions contemplated hereby, WBI and
Westport as lessees have the right under valid and subsisting leases to occupy,
use, possess and control all real property leased by WBI and Westport in all
material respects as presently occupied, used, possessed and controlled by WBI
and Westport.
(b) The business operations and all insurable
properties and assets of WBI and each WBI Subsidiary are insured for their
benefit against all risks which, in the reasonable judgment of the management of
WBI, should be insured against, in each case under policies or bonds issued by
insurers of recognized responsibility, in such amounts with such deductibles and
against such risks and losses as are in the opinion of the management of WBI
adequate for the business engaged in by WBI and the WBI Subsidiaries. As of the
date hereof, neither WBI nor any WBI Subsidiary has received any notice of
cancellation or notice of a
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material amendment of any such insurance policy or bond, and to the best of
WBI's knowledge, is not in default under any such policy or bond, no coverage
thereunder is being disputed, and all material claims thereunder have been filed
in a timely fashion. The WBI Disclosure Schedule sets forth in summary form a
list of all insurance policies of WBI and the WBI Subsidiaries.
3.15 Minute Books. The minute books of WBI and Westport
contain records of all meetings and other corporate action held of their
respective stockholders and Boards of Directors (including committees of their
respective Boards of Directors) that are complete and accurate in all material
respects.
3.16 Environmental Matters. Except as set forth in the WBI
Disclosure Schedule:
(a) Neither WBI nor any WBI Subsidiary has received
any written notice, citation, claim, assessment, proposed assessment or demand
for abatement alleging that WBI or such WBI Subsidiary (either directly or as a
trustee or fiduciary, or as a successor-in-interest in connection with the
enforcement of remedies to realize the value of properties serving as collateral
for outstanding loans) is responsible for the correction or cleanup of any
condition resulting from the violation of any law, ordinance or other
governmental regulation regarding environmental matters, which correction or
cleanup would be material to the business, operations, assets or financial
condition of WBI and the WBI Subsidiaries taken as a whole. WBI has no knowledge
that any toxic or hazardous substances or materials have been emitted,
generated, disposed of or stored on any real property owned or leased by WBI or
any WBI Subsidiary, as OREO or otherwise, or owned or controlled by WBI or any
WBI Subsidiary as a trustee or fiduciary (collectively, "Properties"), in any
manner that violates any presently existing federal, state or local law or
regulation governing or pertaining to such substances and materials, the
violation of which would have a material adverse effect on the business,
operations, assets or financial condition of WBI and the WBI Subsidiaries, taken
as a whole. None of the Properties is in the State of New Jersey.
(b) WBI has no knowledge that any of the Properties
has been operated in any manner in the three years prior to the date of this
Agreement that violated any applicable federal, state or local law or regulation
governing or pertaining to toxic or hazardous substances and materials, the
violation of which would have a material adverse effect on the business,
operations, assets or financial condition of WBI and the WBI Subsidiaries taken
as a whole.
(c) To the best of WBI's knowledge, WBI, each WBI
Subsidiary and any and all of their tenants or subtenants have all necessary
permits and have filed all necessary registrations
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material to permit the operation of the Properties in the manner in which the
operations are currently conducted under all applicable federal, state or local
environmental laws, excepting only those permits and registrations the absence
of which would not have a material adverse effect upon the operations requiring
the permit or registration.
(d) To the knowledge of WBI, there are no under-
ground storage tanks on, in or under any of the Properties and no underground
storage tanks have been closed or removed from any of the Properties while the
property was owned, operated or controlled by WBI or any WBI Subsidiary.
(e) WBI has no knowledge that any of the Properties
meets the statutory criteria of an "Establishment" as that term is defined
pursuant to the Connecticut Transfer of Establishments Act, P.A. 95-183 (the
"Connecticut Transfer Act").
3.17 Reserves. As of March 31, 1996, each of the allowance for
loan losses and the reserve for OREO properties in the WBI Financial Statements
was adequate pursuant to GAAP (consistently applied), and the methodology used
to compute each of the loan loss reserve and the reserve for OREO properties
complies in all material respects with GAAP (consistently applied) and all
applicable policies of the FDIC and the Connecticut Commissioner.
3.18 No Parachute Payments. Except as set forth on the WBI
Disclosure Schedule, no officer, director, employee or agent (or former officer,
director, employee or agent) of WBI or any WBI Subsidiary is entitled now, or
will or may be entitled to as a consequence of this Agreement or the Merger, to
any payment or benefit from WBI, an WBI Subsidiary, HUBCO or HUBank which if
paid or provided would constitute an "excess parachute payment," as defined in
Section 280G of the Code or regulations promulgated thereunder.
3.19 Agreements with Bank Regulators. Neither WBI nor any WBI
Subsidiary is a party to any agreement or memorandum of understanding with, or a
party to any commitment letter, board resolution submitted to a regulatory
authority or similar undertaking to, or is subject to any order or directive by,
or is a recipient of any extraordinary supervisory letter from, any court,
governmental authority or other regulatory or administrative agency or
commission, domestic or foreign ("Governmental Entity") which restricts
materially the conduct of its business, or in any manner relates to its capital
adequacy, its credit or reserve policies or its management, except for those the
existence of which has been disclosed in writing to HUBCO by WBI prior to the
date of this Agreement, nor has WBI been advised by any Governmental Entity that
it is contemplating issuing or requesting (or is considering the appropriateness
of issuing or requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory
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letter, commitment letter or similar submission, except as disclosed in writing
to HUBCO by WBI prior to the date of this Agreement. Neither WBI nor any WBI
Subsidiary is required by Section 32 of the Federal Deposit Insurance Act to
give prior notice to a Federal banking agency of the proposed addition of an
individual to its board of directors or the employment of an individual as a
senior executive officer, except as disclosed in writing to HUBCO by WBI prior
to the date of this Agreement.
3.20 Disclosure. No representation or warranty contained in
Article III of this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements herein not
misleading.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF HUBCO
References herein to the "HUBCO Disclosure Schedule" shall
mean all of the disclosure schedules required by this Article IV, dated as of
the date hereof and referenced to the specific sections and subsections of
Article IV of this Agreement, which have been delivered on the date hereof by
HUBCO to WBI. HUBCO hereby represents and warrants to WBI as follows:
4.1 Corporate Organization.
(a) HUBCO is a corporation duly organized and
validly existing and in good standing under the laws of the State of New Jersey.
HUBCO has the corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being conducted,
and is duly licensed or qualified to do business and is in good standing in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed, qualified or in good standing would not have a material adverse effect
on the business, operations, assets or financial condition of HUBCO or the HUBCO
Subsidiaries (defined below), taken as a whole. HUBCO is registered as a bank
holding company under the BHCA.
(b) Each of the HUBCO Subsidiaries is listed in the
HUBCO Disclosure Schedule. For purposes of this Agreement, the term "HUBCO
Subsidiary" means any corporation, partnership, joint venture or other legal
entity in which HUBCO, directly or indirectly, owns at least a 50% stock or
other equity interest or for which HUBCO, directly or indirectly, acts as a
general partner. Each HUBCO Subsidiary is duly organized and validly existing
and in good standing under the laws of the jurisdiction of its incorporation.
HUBank is a state-chartered commercial bank duly organized and validly existing
and in good standing under the laws of the State of New Jersey. All eligible
accounts of depositors issued by
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HUBank are insured by the Bank Insurance Fund of the FDIC to the fullest extent
permitted by law. Each HUBCO Subsidiary has the corporate power and authority to
own or lease all of its properties and assets and to carry on its business as it
is now being conducted and is duly licensed or qualified to do business and is
in good standing in each jurisdiction in which the nature of the business
conducted by it or the character or location of the properties and assets owned
or leased by it makes such licensing or qualification necessary, except where
the failure to be so licensed, qualified or in good standing would not have a
material adverse effect on the business, operations, assets or financial
condition of HUBCO and the HUBCO Subsidiaries, taken as a whole. The HUBCO
Disclosure Schedule sets forth true and complete copies of the Certificate of
Incorporation and By-laws of HUBCO as in effect on the date hereof.
4.2 Capitalization. The authorized capital stock of HUBCO
consists solely of 50,000,000 common shares, no par value ("HUBCO Common
Stock"), and 10,000,000 shares of preferred stock ("HUBCO Authorized Preferred
Stock"). As of June 12, 1996, there are 13,626,663 shares of HUBCO Common Stock
issued and outstanding, excluding 716,286 shares of treasury stock. From time to
time hereafter, subject to the covenant in Section 5.17 below, HUBCO may sell or
repurchase shares of HUBCO Common Stock. There are no shares of HUBCO Authorized
Preferred Stock outstanding. Except for shares issuable under or arising from
the Agreement and Plan of Merger, dated February 5, 1996 (the "Lafayette
Agreement"), between HUBCO and Lafayette American Bank and Trust Company
("Lafayette"), the HUBCO 1995 Stock Option Plan, and stock options issued to the
former Chief Executive Officer of Urban National Bank (the "HUBCO Stock Option
Plans"), there are no shares of HUBCO Common Stock issuable upon the exercise of
outstanding stock options or otherwise. All issued and outstanding shares of
HUBCO Common Stock, and all issued and outstanding shares of capital stock of
the HUBCO Subsidiaries, have been duly authorized and validly issued, are fully
paid, nonassessable and free of preemptive rights, and are free and clear of all
liens, encumbrances, charges, restrictions or rights of third parties. All of
the outstanding shares of capital stock of the HUBCO Subsidiaries are owned by
HUBCO free and clear of any liens, encumbrances, charges, restrictions or rights
of third parties. Except for the shares issuable under the HUBCO Stock Option
Plans and HUBCO's obligations under the Lafayette Agreement, neither HUBCO nor
any HUBCO Subsidiary has granted or is bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character calling for
the transfer, purchase or issuance of any shares of capital stock of HUBCO or
any HUBCO Subsidiary or any securities representing the right to purchase,
subscribe or otherwise receive any shares of such capital stock or any
securities convertible into any such shares, and there are no agreements or
understandings with respect to voting of any such shares.
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4.3 Authority; No Violation.
(a) Subject to the receipt of all necessary
governmental approvals, HUBCO has full corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby in accordance with the terms hereof. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly approved by the Board of Directors of HUBCO in accordance with
its Certificate of Incorporation and applicable laws and regulations. Except for
such approvals, no other corporate proceedings on the part of HUBCO are
necessary to consummate the transactions so contemplated. This Agreement has
been duly and validly executed and delivered by HUBCO and constitutes the valid
and binding obligation of HUBCO, enforceable against HUBCO in accordance with
its terms.
(b) Neither the execution or delivery of this
Agreement by HUBCO, nor the consummation by HUBCO of the transactions
contemplated hereby in accordance with the terms hereof, or compliance by HUBCO
with any of the terms or provisions hereof will (i) violate any provision of the
Certificate of Incorporation or By-laws of HUBCO, (ii) assuming that the
consents and approvals set forth below are duly obtained, violate any statute,
code, ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to HUBCO, any HUBCO Subsidiary, or any of their respective properties
or assets, or (iii) violate, conflict with, result in a breach of any provision
of, constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, result in the termination of,
accelerate the performance required by, or result in the creation of any lien,
security interest, charge or other encumbrance upon any of the properties or
assets of HUBCO under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which HUBCO is a party, or by which it or any of its
properties or assets may be bound or affected, except, with respect to (ii) and
(iii) above, such as individually or in the aggregate will not have a material
adverse effect on the business, operations, assets or financial condition of
HUBCO and the HUBCO Subsidiaries, taken as a whole, and which will not prevent
or materially delay the consummation of the transactions contemplated hereby.
Except for consents and approvals of or filings or registrations with or notices
to the FDIC, the FRB, the Secretary of State of New Jersey, the Secretary of
State of Connecticut, or other applicable Governmental Entities, no consents or
approvals of or filings or registrations with or notices to any third party or
any public body or authority are necessary on behalf of HUBCO in connection with
(x) the execution and delivery by HUBCO of this Agreement, and (y) the
consummation by HUBCO of the Merger and the other transactions contemplated
hereby, except such as are listed in the HUBCO Disclosure Schedule or in the
aggregate will
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not (if not obtained) have a material adverse effect on the business,
operations, assets or financial condition of HUBCO. To the best of HUBCO's
knowledge, no fact or condition exists which HUBCO has reason to believe will
prevent it from obtaining the aforementioned consents and approvals.
4.4 Financial Statements.
(a) The HUBCO Disclosure Schedule sets forth copies
of the consolidated statements of financial condition of HUBCO as of December
31, 1994 and 1995, and the related consolidated statements of income, changes in
stockholders' equity and of cash flows for the periods ended December 31, in
each of the three fiscal years 1993 through 1995, in each case accompanied by
the audit report of Arthur Andersen, independent public accountants with respect
to HUBCO, and the unaudited consolidated statement of condition of HUBCO as of
March 31, 1996 and the related unaudited consolidated statements of income and
cash flows for the three months ended March 31, 1996 and 1995, as reported in
HUBCO's Quarterly Report on Form 10-Q, filed with the SEC under the 1934 Act
(collectively, the "HUBCO Financial Statements"). The HUBCO Financial Statements
(including the related notes) have been prepared in accordance with GAAP
consistently applied during the periods involved (except as may be indicated
therein or in the notes thereto), and fairly present the consolidated financial
position of HUBCO as of the respective dates set forth therein, and the related
consolidated statements of income, changes in stockholders' equity and of cash
flows (including the related notes, where applicable) fairly present the
consolidated results of operations, changes in stockholders' equity and cash
flows of HUBCO for the respective fiscal periods set forth therein.
(b) The books and records of HUBCO the HUBCO
Subsidiaries are being maintained in material compliance with applicable legal
and accounting requirements, and reflect only actual transactions.
(c) Except as and to the extent reflected, dis-
closed or reserved against in the HUBCO Financial Statements (including the
notes thereto), as of March 31, 1996 neither HUBCO nor any of the HUBCO
Subsidiaries had any obligation or liability, whether absolute, accrued,
contingent or otherwise, material to the business, operations, assets or
financial condition of HUBCO or any of the HUBCO Subsidiaries which were
required by GAAP (consistently applied) to be disclosed in HUBCO's consolidated
statement of condition as of March 31, 1996 or the notes thereto. Except for the
transactions contemplated by this Agreement, and other proposed acquisitions by
HUBCO since March 31, 1996 reflected in any Form 8-K filed by HUBCO with the
SEC, neither HUBCO nor any HUBCO Subsidiary has incurred any liabilities since
March 31, 1996 except in the ordinary course of business and consistent with
past practice.
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4.5 Broker's and Other Fees. Neither HUBCO nor any of its
directors or officers has employed any broker or finder or incurred any
liability for any broker's or finder's fees or commissions in connection with
any of the transactions contemplated by this Agreement.
4.6 Absence of Certain Changes or Events. There has not been
any material adverse change in the business, operations, assets or financial
condition of HUBCO and HUBCO's Subsidiaries taken as a whole since March 31,
1996 and to the best of HUBCO's knowledge, except for any merger related charges
arising from or connected with the consummation of the transactions contemplated
by the Lafayette Agreement and the effect of the consummation of other publicly
announced mergers or acquisitions, not yet consummated (the "Effects of
Announced Acquisitions"), no facts or condition exists which HUBCO believes will
cause such a material adverse change in the future.
4.7 Legal Proceedings. Except as disclosed in the HUBCO
Disclosure Schedule, and except for ordinary routine litigation incidental to
the business of HUBCO or its Subsidiaries, neither HUBCO nor any of its
Subsidiaries is a party to any, and there are no pending or, to the best of
HUBCO's knowledge, threatened legal, administrative, arbitral or other
proceedings, claims, actions or governmental investigations of any nature
against HUBCO or any of its Subsidiaries which, if decided adversely to HUBCO or
its Subsidiaries, are reasonably likely to have a material adverse effect on the
business, operations, assets or financial condition of HUBCO or its
Subsidiaries. Except as disclosed in the HUBCO Disclosure Schedule, neither
HUBCO nor HUBCO's Subsidiaries is a party to any order, judgment or decree
entered in any lawsuit or proceeding which is material to HUBCO or its
Subsidiaries.
4.8 Tax Returns.
(a) HUBCO and each HUBCO Subsidiary have duly filed
all Returns required to be filed by them in respect of any federal, state and
local taxes (including withholding taxes, penalties or other payments required)
and have duly paid all such taxes due and payable, other than taxes or other
charges which are being contested in good faith (and disclosed to WBI in
writing). HUBCO and HUBCO's Subsidiaries have established on their books and
records reserves that are adequate for the payment of all federal, state and
local taxes not yet due and payable, but are incurred in respect of HUBCO or
HUBCO's Subsidiaries through such date. The HUBCO Disclosure Schedule identifies
the federal income tax returns of HUBCO and HUBCO's Subsidiaries which have been
examined by the IRS within the past six years. No deficiencies were asserted as
a result of such examinations which have not been resolved and paid in full. The
HUBCO Disclosure Schedule identifies the applicable state income tax returns of
HUBCO and HUBCO's Subsidiaries which
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have been examined by the applicable authorities. No deficiencies were asserted
as a result of such examinations which have not been resolved and paid in full.
To the best knowledge of HUBCO, there are no audits or other administrative or
court proceedings presently pending nor any other disputes pending with respect
to, or claims asserted for, taxes or assessments upon HUBCO or HUBCO's
Subsidiaries, nor has HUBCO or HUBCO's Subsidiaries given any currently
outstanding waivers or comparable consents regarding the application of the
statute of limitations with respect to any taxes or Returns.
(b) Except as set forth in the HUBCO Disclosure
Schedule, neither HUBCO nor any Subsidiary of HUBCO (i) has requested any
extension of time within which to file any Return which Return has not since
been filed, (ii) is a party to any agreement providing for the allocation or
sharing of taxes with third parties, (iii) is required to include in income any
adjustment pursuant to Section 481(a) of the Code, by reason of a voluntary
change in accounting method initiated by HUBCO (nor does HUBCO have any
knowledge that the IRS has proposed any such adjustment or change of accounting
method) or (iv) has filed a consent pursuant to Section 341(f) of the Code or
agreed to have Section 341(f)(2) of the Code apply.
4.9 Employee Benefit Plans.
(a) Except as disclosed in the HUBCO Disclosure
Schedule and the HUBCO Stock Option Plan, neither HUBCO or its Subsidiaries
maintains or contributes to any "employee pension benefit plan" (the "HUBCO
Pension Plans"), within the meaning of Section 3(2)(A) of ERISA, "employee
welfare benefit plan" within the meaning of Section 3(1) of ERISA (the "HUBCO
Welfare Plans"), stock option plan, stock purchase plan, deferred compensation
plan, severance plan, bonus plan, employment agreement or other similar plan,
program or arrangement. HUBCO has not, since September 2, 1974, contributed to
any "Multiemployer Plan", as such term is defined in Section 3(37) of ERISA.
(b) The present value of all accrued benefits, both
vested and non-vested, under each of HUBCO's Pension Plans subject to Title IV
of ERISA, based upon the actuarial assumptions used for funding purposes in the
most recent actuarial valuation prepared by such HUBCO Pension Plan's actuary,
did not exceed the then current value of the assets of such plans allocable to
such accrued benefits. The actuarial assumptions then utilized for such plans
were reasonable and appropriate as of the last valuation date and reflect then
current market conditions.
(c) During the last six years, the PBGC has not
asserted any claim for liability against HUBCO or any of its Subsidiaries which
has not been paid in full.
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(d) All premiums (and interest charges and
penalties for late payment, if applicable) due to the PBGC with respect to each
HUBCO Pension Plan have been paid. All contributions required to be made to each
HUBCO Pension Plan under the terms thereof, ERISA or other applicable law have
been timely made, and all amounts properly accrued to date as liabilities of
HUBCO which have not been paid have been properly recorded on the books of
HUBCO.
(e) Except as disclosed in the HUBCO Disclosure
Schedule, each of the HUBCO Pension Plans, HUBCO Welfare Plans and each other
employee benefit plan and arrangement identified on the HUBCO Disclosure
Schedule has, since January 1, 1990, been operated in compliance in all material
respects with any applicable provisions of ERISA, the Code, all regulations,
rulings and announcements promulgated or issued thereunder, and all other
applicable governmental laws and regulations. Furthermore, if HUBCO maintains
any HUBCO Pension Plan, HUBCO has received a favorable determination letter from
the IRS which takes into account the Tax Reform Act of 1986 and subsequent
legislation and, except as disclosed in the HUBCO Disclosure Schedule, HUBCO is
not aware of any fact or circumstance which would disqualify any plan.
(f) To the best knowledge of HUBCO, no non-exempt
prohibited transaction, within the meaning of Section 4975 of the Code or
Section 406 of ERISA, has occurred with respect to any of the HUBCO Welfare
Plans or HUBCO Pension Plans.
(g) No HUBCO Pension Plan or any trust created
thereunder has been terminated, nor have there been any "reportable events"
(notice of which has not been waived by the PBGC), within the meaning of Section
4034(b) of ERISA, with respect to any of the HUBCO Pension Plans.
(h) No "accumulated funding deficiency", within the
meaning of Section 412 of the Code, has been incurred with respect to any of the
HUBCO Pension Plans.
(i) There are no material pending or, to the best
knowledge of HUBCO, material threatened claims (other than routine claims for
benefits) by, on behalf of, or against any of the HUBCO Pension Plans or HUBCO
Welfare Plans, any trusts created thereunder or any other plan or arrangement
identified in the HUBCO Disclosure Schedule.
(j) Except with respect to customary health, life
and disability benefits or as disclosed in the HUBCO Disclosure Schedule, there
are no unfunded benefit obligations which are not accounted for by reserves
shown on the HUBCO Financial Statements and established under GAAP or otherwise
noted on such Financial Statements.
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(k) With respect to each HUBCO Pension Plan and
HUBCO Welfare Plan that is funded wholly or partially through an insurance
policy, there will be no liability of HUBCO or its Subsidiaries as of the
Effective Time under any such insurance policy or ancillary agreement with
respect to such insurance policy in the nature of a retroactive rate adjustment,
loss sharing arrangement or other actual or contingent liability arising wholly
or partially out of events occurring prior to the Effective Time.
4.10 Reports. Since January 1, 1994, HUBCO has filed all
reports that it was required to file with the SEC under the 1934 Act, all of
which complied in all material respects with all applicable requirements of the
1934 Act and the rules and regulations adopted thereunder. As of their
respective dates, each such report and each registration statement, proxy
statement, form or other document filed by HUBCO with the SEC, including without
limitation, any financial statements or schedules included therein, did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading,
provided that information as of a later date shall be deemed to modify
information as of an earlier date. Since January 1, 1994, HUBCO and each HUBCO
Subsidiary has duly filed all material forms, reports and documents which they
were required to file with each agency charged with regulating any aspect of
their business.
4.11 HUBCO Information. The information relating to HUBCO and
its Subsidiaries (including, without limitation, information regarding other
transactions which HUBCO is required to disclose), this Agreement and the
transactions contemplated hereby in the Registration Statement and Proxy
Statement-Prospectus (as defined in Section 5.6(a) hereof), as of the date of
the mailing of the Proxy Statement-Prospectus, and up to and including the date
of the meeting of stockholders of WBI to which such Proxy Statement- Prospectus
relates, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Registration Statement shall comply as to form in all
material respects with the provisions of the 1933 Act, the 1934 Act and the
rules and regulations promulgated thereunder.
4.12 Compliance With Applicable Law. Except as set forth in
the HUBCO Disclosure Schedule, each of HUBCO and HUBCO's Subsidiaries holds all
material licenses, franchises, permits and authorizations necessary for the
lawful conduct of its business, and has complied with and is not in default in
any respect under any applicable law, statute, order, rule, regulation, policy
and/or guideline of any federal, state or local governmental authority relating
to HUBCO or HUBCO's Subsidiaries (including without limitation consumer,
community and fair lending laws) (other than
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where such default or noncompliance will not result in a material adverse effect
on the business, operations, assets or financial condition of HUBCO and HUBCO's
Subsidiaries taken as a whole) and HUBCO has not received notice of violation
of, and does not know of any violations of, any of the above.
4.13 Contracts. Except as disclosed in the HUBCO Disclosure
Schedule, neither HUBCO nor its Subsidiaries, or to the best knowledge of HUBCO,
any party thereto, is in default in any material respect under any material
lease, contract, mortgage, promissory note, deed of trust, loan or other
commitment (except those under which HUBank or another HUBCO Subsidiary is or
will be the creditor) or arrangement, except for defaults which individually or
in the aggregate would not have a material adverse effect on the business,
operations, assets or financial condition of HUBCO and the HUBCO Subsidiaries,
taken as a whole.
4.14 Properties and Insurance.
(a) HUBCO and the HUBCO Subsidiaries have good and,
as to owned real property, marketable title to all material assets and
properties, whether real or personal, tangible or intangible, reflected in
HUBCO's consolidated balance sheet as of March 31, 1996, or owned and acquired
subsequent thereto (except to the extent that such assets and properties have
been disposed of for fair value in the ordinary course of business since March
31, 1996), subject to no encumbrances, liens, mortgages, security interests or
pledges, except (i) those items that secure liabilities that are reflected in
said balance sheet or the notes thereto or that secure liabilities incurred in
the ordinary course of business after the date of such balance sheet, (ii)
statutory liens for amounts not yet delinquent or which are being contested in
good faith, (iii) such encumbrances, liens, mortgages, security interests,
pledges and title imperfections that are not in the aggregate material to the
business, operations, assets, and financial condition of HUBCO and the HUBCO
Subsidiaries taken as a whole and (iv) with respect to owned real property,
title imperfections noted in title reports. Except as disclosed in the HUBCO
Disclosure Schedule, HUBCO and the HUBCO Subsidiaries as lessees have the right
under valid and subsisting leases to occupy, use, possess and control all
property leased by HUBCO or the HUBCO Subsidiaries in all material respects as
presently occupied, used, possessed and controlled by HUBCO and the HUBCO
Subsidiaries.
(b) The business operations and all insurable
properties and assets of HUBCO and the HUBCO Subsidiaries are insured for their
benefit against all risks which, in the reasonable judgment of the management of
HUBCO, should be insured against, in each case under policies or bonds issued by
insurers of recognized responsibility, in such amounts with such deductibles and
against such risks and losses as are in the opinion of the management of HUBCO
adequate for the business engaged in by HUBCO
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and the HUBCO Subsidiaries. As of the date hereof, neither HUBCO nor any HUBCO
Subsidiary has received any notice of cancellation or notice of a material
amendment of any such insurance policy or bond or is in default under any such
policy or bond, no coverage thereunder is being disputed and all material claims
thereunder have been filed in a timely fashion.
4.15 Funding and Capital Adequacy. At the Effective Time,
after giving pro forma effect to the Merger and any other acquisition which
HUBCO or its Subsidiaries have agreed to consummate, HUBCO will have sufficient
capital to satisfy all applicable regulatory capital requirements.
4.16 Environmental Matters. Except as disclosed in the HUBCO
Disclosure Schedule, neither HUBCO nor any HUBCO Subsidiary has received any
written notice, citation, claim, assessment, proposed assessment or demand for
abatement alleging that HUBCO or any HUBCO Subsidiary (either directly, or as a
trustee or fiduciary, or as a successor-in-interest in connection with the
enforcement of remedies to realize the value of properties serving as collateral
for outstanding loans) is responsible for the correction or cleanup of any
condition resulting from the violation of any law, ordinance or other
governmental regulation regarding environmental matters which correction or
cleanup would be material to the business, operations, assets or financial
condition of HUBCO and the HUBCO Subsidiaries taken as a whole. Except as
disclosed in the HUBCO Disclosure Schedule, HUBCO has no knowledge that any
toxic or hazardous substances or materials have been emitted, generated,
disposed of or stored on any property currently owned or leased by HUBCO or any
HUBCO Subsidiary in any manner that violates any presently existing federal,
state or local law or regulation governing or pertaining to such substances and
materials, the violation of which would have a material adverse effect on the
business, operations, assets or financial condition of HUBCO and the HUBCO
Subsidiaries, taken as a whole.
4.17 Reserves. As of March 31, 1996, each of the allowance for
loan losses and the reserve for OREO properties in the HUBCO Financial
Statements was adequate pursuant to GAAP (consistently applied), and the
methodology used to compute each of the loan loss reserve and the reserve for
OREO properties complies in all material respects with GAAP (consistently
applied) and all applicable policies of the FDIC and the New Jersey Department
of Banking.
4.18 HUBCO Stock. As of the date hereof, HUBCO has available
and reserved shares of HUBCO Common Stock sufficient for issuance pursuant to
the Merger and upon the exercise of HUBCO Warrants and Continuing Stock Options
and conversion of New HUBCO Preferred Stock subsequent thereto. The HUBCO Stock
to be issued hereunder pursuant to the Merger, upon exercise of the HUBCO
Warrants and the Continuing Stock Options, and upon the conversion
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of the New HUBCO Preferred Stock, when so issued, will be duly authorized and
validly issued, fully paid, nonassessable, free of preemptive rights and free
and clear of all liens, encumbrances or restrictions created by or through
HUBCO, with no personal liability attaching to the ownership thereof. The HUBCO
Stock to be issued hereunder pursuant to the Merger, upon exercise of the HUBCO
Warrants and the Continuing Stock Options, and upon the conversion of the New
HUBCO Preferred Stock, when so issued, will be registered under the 1933 Act and
issued in accordance with all applicable state and federal laws, rules and
regulations.
4.19 Agreements with Bank Regulators. Neither HUBCO nor any
HUBCO Subsidiary is a party to any agreement or memorandum of understanding
with, or a party to any commitment letter, board resolution submitted to a
regulatory authority or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter from,
any Government Entity which restricts materially the conduct of its business, or
in any manner relates to its capital adequacy, its credit or reserve policies or
its management, except for those the existence of which has been disclosed in
writing to WBI by HUBCO prior to the date of this Agreement, nor has HUBCO been
advised by any Governmental Entity that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting) any
such order, decree, agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter or similar submission, except as disclosed
in writing to WBI by HUBCO prior to the date of this Agreement. Neither HUBCO
nor any HUBCO Subsidiary is required by Section 32 of the Federal Deposit
Insurance Act to give prior notice to a Federal banking agency of the proposed
addition of an individual to its board of directors or the employment of an
individual as a senior executive officer, except as disclosed in writing to WBI
by HUBCO prior to the date of this Agreement.
4.20 Disclosure. No representation or warranty contained in
Article IV of this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements herein not
misleading.
ARTICLE V - COVENANTS OF THE PARTIES
5.1 Conduct of the Business of WBI. During the period from the
date of this Agreement to the Effective Time, WBI shall, and shall cause
Westport to, conduct their respective businesses only in the ordinary course and
consistent with prudent banking practice, except for transactions permitted
hereunder or with the prior written consent of HUBCO, which consent will not be
unreasonably withheld. WBI also shall use its reasonable best efforts to (i)
preserve its business organization and that of Westport intact, (ii) keep
available to itself and Westport the
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present services of its employees and those of Westport, and (iii) preserve for
itself and HUBCO the goodwill of its customers and those of Westport and others
with whom business relationships exist.
5.2 Negative Covenants. From the date hereof to the Effective
Time, except as otherwise approved by HUBCO in writing, or as set forth in the
WBI Disclosure Schedule, or as permitted or required by this Agreement, neither
WBI not Westport will:
(a) change any provision of its Certificate of
Incorporation or By-laws or any similar governing documents;
(b) change the number of shares of its authorized
or issued capital stock (other than upon exercise of stock
options or warrants described on the WBI Disclosure Schedule
in accordance with the terms thereof) or issue or grant any
option, warrant, call, commitment, subscription, right to
purchase 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 its capital stock, or declare, set
aside or pay any dividend, or other distribution (whether in
cash, stock or property or any combination thereof) in respect
of its capital stock; provided, however, from the date hereof
to the Effective Time, WBI may declare, set aside or pay cash
dividends per share of WBI Common Stock equivalent to the cash
dividends per share (i.e., at the same rate as that paid by
HUBCO multiplied by the Exchange Ratio) declared, set aside or
paid by HUBCO during such period, except that following its
July 1996 dividend WBI shall pay such dividends on March 1,
June 1, September 1, and December 1 of each year and shall use
the same record date as that used by HUBCO;
(c) grant any severance or termination pay (other
than pursuant to written policies or contracts of WBI in
effect on the date hereof and disclosed to HUBCO in the WBI
Disclosure Schedule) to, or enter into or amend any employment
or severance agreement with, any of its directors, officers or
employees; adopt any new employee benefit plan or arrangement
of any type; or award any increase in compensation or benefits
to its directors, officers or employees, except in each case
as specified in Section 5.2 of the WBI Disclosure Schedule;
(d) sell or dispose of any substantial amount of
assets or voluntarily incur any significant liabilities other
than in the ordinary course of business consistent with past
practices and policies or in response to
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substantial financial demands upon the business of WBI or
Westport;
(e) make any capital expenditures other than
pursuant to binding commitments existing on the date hereof,
expenditures necessary to maintain existing assets in good
repair, and expenditures described in business plans or
budgets previously furnished to HUBCO;
(f) file any applications or make any contract with
respect to branching or site location or relocation;
(g) agree to acquire in any manner whatsoever
(other than to realize upon collateral for a defaulted loan)
any business or entity or make any investments in securities
other than investments in government or agency bonds having a
maturity of less than five years;
(h) make any material change in its accounting
methods or practices, other than changes required in
accordance with generally accepted accounting principles or
regulatory authorities;
(i) take any action that would result in any of its
representations and warranties contained in Article III of
this Agreement not being true and correct in any material
respect at the Effective Time or that would cause any of its
conditions to Closing not to be satisfied;
(j) without first conferring with HUBCO, make or
commit to make any new loan or other extension of credit in an
amount of $1,000,000 or more, renew for a period in excess of
one year any existing loan or other extension of credit in an
amount of $1,000,000 or more, or increase by $1,000,000 or
more the aggregate credit outstanding to any borrower or group
of affiliated borrowers, except such loan initiations,
renewals or increases that are committed as of the date of
this Agreement and identified on the WBI Disclosure Schedule
and residential mortgage loans made in the ordinary course of
business in accordance with past practice; or
(k) agree to do any of the foregoing.
5.3 No Solicitation. WBI and Westport shall not, directly or
indirectly, encourage or solicit or hold discussions or negotiations with, or
provide any information to, any person, entity or group (other than HUBCO)
concerning any merger or sale of shares of capital stock or sale of substantial
assets or liabilities not in the ordinary course of business, or similar
transactions involving WBI or Westport (an "Acquisition
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Transaction"). Notwithstanding the foregoing, WBI may enter into discussions or
negotiations or provide information in connection with an unsolicited possible
Acquisition Transaction if the Board of Directors of WBI, after consulting with
counsel, determines in the exercise of its fiduciary responsibilities that such
discussions or negotiations should be commenced or such information should be
furnished. WBI shall promptly communicate to HUBCO the terms of any proposal,
whether written or oral, which it may receive in respect of any such Acquisition
Transaction and the fact that it is having discussions or negotiations with a
third party about an Acquisition Transaction.
5.4 Current Information. During the period from the date of
this Agreement to the Effective Time, each of WBI and HUBCO will cause one or
more of its designated representatives to confer with representatives of the
other party on a monthly or more frequent basis regarding its business,
operations, properties, assets and financial condition and matters relating to
the completion of the transactions contemplated herein. On a monthly basis, WBI
agrees to provide HUBCO, and HUBCO agrees to provide WBI, with internally
prepared profit and loss statements no later than 15 days after the close of
each calendar month. As soon as reasonably available, but in no event more than
45 days after the end of each fiscal quarter (other than the last fiscal quarter
of each fiscal year) ending on or after June 30, 1996, WBI will deliver to HUBCO
and HUBCO will deliver to WBI their respective quarterly reports on Form 10-Q,
as filed with the SEC under the 1934 Act. As soon as reasonably available, but
in no event more than 90 days after the end of each calendar year, WBI will
deliver to HUBCO and HUBCO will deliver to WBI their respective Annual Reports
on Form 10-K as filed with the SEC under the 1934 Act.
5.5 Access to Properties and Records; Confidentiality.
(a) WBI and Westport shall permit HUBCO and its
representatives, and HUBCO shall permit, and cause each HUBCO Subsidiary to
permit, WBI and its representatives, reasonable access to their respective
properties, and shall disclose and make available to HUBCO and its
representatives, or WBI and its representatives, as the case may be, all books,
papers and records relating to its assets, stock ownership, properties,
operations, obligations and liabilities, including, but not limited to, all
books of account (including the general ledger), tax records, minute books of
directors' and stockholders' meetings, organizational documents, by-laws,
material contracts and agreements, filings with any regulatory authority,
accountants' work papers, litigation files, plans affecting employees, and any
other business activities or prospects in which HUBCO and its representatives or
WBI and its representatives may have a reasonable interest. Neither party shall
be required to provide access to or to disclose information where such access or
disclosure would violate or prejudice the rights of any customer, would
contravene
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any law, rule, regulation, order or judgment or would waive any privilege. The
parties will use their reasonable best efforts to obtain waivers of any such
restriction (other than waivers of the attorney-client privilege) and in any
event make appropriate substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply. Notwithstanding the
foregoing, WBI acknowledges that HUBCO may be involved in discussions concerning
other potential acquisitions and HUBCO shall not be obligated to disclose such
information to WBI except as such information is disclosed to HUBCO's
shareholders generally.
(b) All information furnished by the parties hereto
previously in connection with transactions contemplated by this Agreement or
pursuant hereto shall be used solely for the purpose of evaluating the Merger
contemplated hereby and shall be treated as the sole property of the party
delivering the information until consummation of the Merger contemplated hereby,
and if such Merger shall not occur, each party and each party's advisors shall
return to the other party all documents or other materials containing,
reflecting or referring to such information, will not retain any copies of such
information, shall use its reasonable best efforts to keep confidential all such
information, and shall not directly or indirectly use such information for any
competitive or other commercial purposes. In the event that the Merger
contemplated hereby does not occur, all documents, notes and other writings
prepared by a party hereto or its advisors based on information furnished by the
other party shall be promptly destroyed. The obligation to keep such information
confidential shall continue for five years from the date the proposed Merger is
abandoned but shall not apply to (i) any information which (A) the party
receiving the information can establish by convincing evidence was already in
its possession prior to the disclosure thereof to it by the other party; (B) was
then generally known to the public; (C) became known to the public through no
fault of the party receiving such information; or (D) was disclosed to the party
receiving such information by a third party not bound by an obligation of
confidentiality; or (ii) disclosures pursuant to a legal requirement or in
accordance with an order of a court of competent jurisdiction.
5.6 Regulatory Matters.
(a) For the purposes of holding the Stockholders
Meeting (as such term is defined in Section 5.7 hereof), and qualifying under
applicable federal and state securities laws the HUBCO Stock to be issued to WBI
stockholders in connection with the Merger, the parties hereto shall cooperate
in the preparation and filing by HUBCO or WBI (as applicable) with the SEC of a
Registration Statement and a combined proxy statement and prospectus satisfying
all applicable requirements of applicable state and federal laws, including the
1933 Act, the 1934 Act and applicable state securities laws and the rules and
regulations
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thereunder (such proxy statement and prospectus in the form mailed by WBI and
HUBCO to the WBI shareholders together with any and all amendments or
supplements thereto, being herein referred to as the "Proxy
Statement-Prospectus" and the various documents to be filed by HUBCO under the
1933 Act with the SEC to register the HUBCO Stock for sale, including the Proxy
Statement-Prospectus, are referred to herein as the "Registration Statement").
(b) HUBCO shall furnish WBI with such information
concerning HUBCO and its Subsidiaries (including, without limitation,
information regarding other transactions which HUBCO is required to disclose) as
is necessary in order to cause the Proxy Statement-Prospectus, insofar as it
relates to such corporations, to comply with Section 5.6(a) hereof. HUBCO agrees
promptly to advise WBI if at any time prior to the Stockholders Meeting, any
information provided by HUBCO in the Proxy Statement-Prospectus becomes
incorrect or incomplete in any material respect and to provide WBI with the
information needed to correct such inaccuracy or omission. HUBCO shall furnish
WBI with such supplemental information as may be necessary in order to cause the
Proxy Statement-Prospectus, insofar as it relates to HUBCO and its Subsidiaries,
to comply with Section 5.6(a) after the mailing thereof to WBI shareholders.
(c) WBI shall furnish HUBCO with such information
concerning WBI as is necessary in order to cause the Proxy Statement-Prospectus,
insofar as it relates to WBI, to comply with Section 5.6(a) hereof. WBI agrees
promptly to advise HUBCO if at any time prior to the Stockholders Meeting, any
information provided by WBI in the Proxy Statement-Prospectus becomes incorrect
or incomplete in any material respect and to provide HUBCO with the information
needed to correct such inaccuracy or omission. WBI shall furnish HUBCO with such
supplemental information as may be necessary in order to cause the Proxy
Statement-Prospectus, insofar as it relates to WBI, to comply with Section
5.6(a) after the mailing thereof to WBI shareholders.
(d) HUBCO shall as promptly as practicable make
such filings as are necessary in connection with the offering of the HUBCO Stock
with applicable state securities agencies and shall use all reasonable efforts
to qualify the offering of such stock under applicable state securities laws at
the earliest practicable date. WBI shall promptly furnish HUBCO with such
information regarding WBI shareholders as HUBCO requires to enable it to
determine what filings are required hereunder. WBI authorizes HUBCO to utilize
in such filings the information concerning WBI provided to HUBCO in connection
with, or contained in, the Proxy Statement-Prospectus. HUBCO shall furnish WBI's
counsel with copies of all such filings and keep WBI advised of the status
thereof. HUBCO shall as promptly as practicable file the Registration Statement
containing the Proxy Statement-Prospectus with the SEC, and each of HUBCO and
WBI shall promptly notify the
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other of all communications, oral or written, with the SEC concerning the
Registration Statement and the Proxy Statement- Prospectus.
(e) HUBCO shall cause the HUBCO Common Stock
issuable pursuant to the Merger to be listed on the NASDAQ at the Effective
Time. HUBCO shall cause the HUBCO Common Stock which shall be issuable pursuant
to exercise of HUBCO Warrants or Continuing Stock Options or conversion of New
HUBCO Preferred Stock to be accepted for listing on the NASDAQ when issued.
(f) The parties hereto will cooperate with each
other and use their reasonable best efforts to prepare all necessary
documentation, to effect all necessary filings and to obtain all necessary
permits, consents, approvals and authorizations of all third parties and
governmental bodies necessary to consummate the transactions contemplated by
this Agreement as soon as possible, including, without limitation, those
required by the FDIC, the FRB and the Connecticut Commissioner. The parties
shall each have the right to review in advance (and shall do so promptly) all
filings with, including all information relating to the other, as the case may
be, and any of their respective subsidiaries, which appears in any filing made
with, or written material submitted to, any third party or governmental body in
connection with the transactions contemplated by this Agreement.
(g) Each of the parties will promptly furnish each
other with copies of written communications received by them or any of their
respective subsidiaries from, or delivered by any of the foregoing to, any
Governmental Entity in respect of the transactions contemplated hereby.
(h) WBI acknowledges that HUBCO is in or may be in
the process of acquiring other banks and financial institutions and that in
connection with such acquisitions, information concerning WBI may be required to
be included in the registration statements, if any, for the sale of securities
of HUBCO or in SEC reports in connection with such acquisitions. WBI agrees to
provide HUBCO with any information, certificates, documents or other materials
about WBI as are reasonably necessary to be included in such other SEC reports
or registration statements, including registration statements which may be filed
by HUBCO prior to the Effective Time. WBI shall use its reasonable efforts to
cause its attorneys and accountants to provide HUBCO and any underwriters for
HUBCO with any consents, comfort letters, opinion letters, reports or
information which are necessary to complete the registration statements and
applications for any such acquisition or issuance of securities. HUBCO shall
reimburse WBI for reasonable expenses thus incurred by WBI should this
transaction be terminated for any reason other than as described in Section
7.1(f). HUBCO shall not file with the SEC any registration statement or
amendment thereto or supplement thereof containing information regarding WBI
unless
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WBI shall have consented to such filing, which consent shall not be unreasonably
delayed or withheld.
(i) The parties hereto acknowledge that the
approval of HUBCO's shareholders will not be required under the rules of NASDAQ
if the transactions contemplated by the Lafayette Agreement are consummated. The
parties further acknowledge and agree that if the Lafayette Agreement is
terminated prior to consummation for any reason, then the approval of the
shareholders of HUBCO shall be a condition to the Closing hereunder and HUBCO
agrees to cause a special shareholder meeting to be held promptly to vote upon
the issuance of the HUBCO stock hereunder. In such event the parties agree to
use the Proxy Statement-Prospectus as a joint proxy statement to solicit such
approval.
(j) Between the date of this Agreement and the
Effective Time, WBI shall cooperate with HUBCO to reasonably conform WBI's
policies and procedures regarding applicable regulatory matters, including
without limitation Federal Reserve, Bank Secrecy Act and FDIC matters, to those
of HUBCO as HUBCO may reasonably identify to WBI from time to time.
5.7 Approval of Stockholders. WBI will (i) take all steps
necessary duly to call, give notice of, convene and hold a meeting of the
stockholders of WBI (the "Stockholders Meeting") for the purpose of securing the
WBI stockholder approval of this Agreement required by law, (ii) subject to the
qualification set forth in Section 5.3 hereof and the right not to make a
recommendation or to withdraw a recommendation if its investment banker
withdraws its fairness opinion prior to the Stockholders Meeting, recommend to
the stockholders of WBI the approval of this Agreement and the transactions
contemplated hereby and use its reasonable best efforts to obtain, as promptly
as practicable, such approval, and (iii) cooperate and consult with HUBCO with
respect to each of the foregoing matters.
If it becomes necessary under NASDAQ rules or applicable laws
to obtain HUBCO shareholder approval, HUBCO shall take all steps necessary to
obtain the approval of its shareholders as promptly as possible. In connection
therewith, HUBCO shall take all steps necessary to duly call, give notice and
convene a meeting of its shareholders for such purpose.
5.8 Further Assurances.
(a) Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its reasonable best efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
satisfy the conditions to Closing and to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
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using reasonable efforts to lift or rescind any injunction or restraining order
or other order adversely affecting the ability of the parties to consummate the
transactions contemplated by this Agreement and using its reasonable best
efforts to prevent the breach of any representation, warranty, covenant or
agreement of such party contained or referred to in this Agreement and to
promptly remedy the same. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to this Agreement
shall take all such necessary action. Nothing in this section shall be construed
to require any party to participate in any threatened or actual legal,
administrative or other proceedings (other than proceedings, actions or
investigations to which it is a party or subject or threatened to be made a
party or subject) in connection with consummation of the transactions
contemplated by this Agreement unless such party shall consent in advance and in
writing to such participation and the other party agrees to reimburse and
indemnify such party for and against any and all costs and damages related
thereto if the Merger is not consummated.
(b) HUBCO agrees that from the date hereof to the
Effective Time, except as otherwise approved by WBI in writing or as permitted
or required by this Agreement, HUBCO will not, nor will it permit any HUBCO
Subsidiary to, take any action: (i) that would result in any of its
representations and warranties contained in Article IV of this Agreement not
being true and correct in any material respect at the Effective Time, or (ii)
that would cause any of its conditions to Closing not to be satisfied, or (iii)
that would constitute a breach or default of its obligations under this
Agreement, or (iv) that would, at the time such action is taken, reasonably be
expected to: (x) delay or cause a delay of more than 60 days in the receipt of
any regulatory approvals or other approvals or consents which are required to be
obtained in order to consummate the Merger or (y) materially jeopardize the
receipt of such approvals or consents.
5.9 Public Announcements. HUBCO and WBI shall cooperate with
each other in the development and distribution of all news releases and other
public filings and disclosures with respect to this Agreement or the Merger
transactions contemplated hereby, and HUBCO and WBI agree that unless approved
mutually by them in advance, they will not issue any press release or written
statement for general circulation relating primarily to the transactions
contemplated hereby, except as may be otherwise required by law or regulation in
the opinion of counsel.
5.10 Failure to Fulfill Conditions. In the event that HUBCO or
WBI determines that a material condition to its obligation to consummate the
transactions contemplated hereby cannot be fulfilled on or prior to March 31,
1997 and that it will not waive that condition, it will promptly notify the
other party. Except
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for any acquisition or merger discussions HUBCO may enter into with other
parties, WBI and HUBCO will promptly inform the other of any facts applicable to
WBI or HUBCO, respectively, or their respective directors or officers, that
would be likely to prevent or materially delay approval of the Merger by any
Governmental Entity or which would otherwise prevent or materially delay
completion of the Merger.
5.11 Employee Matters.
(a) Following consummation of the Merger, HUBCO
agrees with WBI to honor the existing written contracts with officers and
employees of WBI and Westport that are included in the WBI Disclosure Schedule,
except as otherwise specified in Section 5.20 and 6.3(e) hereof.
(b) Following consummation of the Merger, HUBCO
shall make available to all employees and officers of Westport thereafter
employed by any of HUBCO's bank subsidiaries (which may include Westport) (the
"New Employer") coverage under the benefit plans generally available to HUBank's
employees and officers (including pension and health and hospitalization) on the
terms and conditions available to HUBank's employees and officers, and shall
honor the severance policies of WBI and Westport previously disclosed to HUBCO
in writing with respect to persons whose employment is terminated within six
months after the Effective Time. After the Effective Time, HUBCO may terminate,
merge or change existing WBI and Westport benefit plans to the extent permitted
under applicable law. Employees of Westport employed by the New Employer will
receive credit for prior employment by Westport for the purposes of determining
their eligibility to participate in all employee benefit plans of New Employer.
Service completed while employed by Westport will also be taken into account for
purposes of determining benefit levels under New Employer's vacation plan, and
severance plan (after the initial six month period has lapsed). Credit for prior
service will be given for purposes of vesting, but not for benefit accrual under
New Employer's pension benefit plans. No pre-existing condition limitation or
evidence of insurability shall be imposed under New Employer's group health
plans, unless such employee was subject to such a limitation under Westport's
group health plan.
5.12 Disclosure Supplements. From time to time prior to the
Effective Time, each party hereto will promptly supplement or amend (by written
notice to the other) its respective Disclosure Schedules delivered pursuant
hereto with respect to any matter hereafter arising which, if existing,
occurring or known at the date of this Agreement, would have been required to be
set forth or described in such Schedules or which is necessary to correct any
information in such Schedules which has been rendered materially inaccurate
thereby. For the purpose of determining satisfaction of the conditions set forth
in Article VI and subject to Sections
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6.2(a) and 6.3(a), no supplement or amendment to the parties' respective
Disclosure Schedules shall correct or cure any warranty which was untrue when
made, but shall enable the disclosure of subsequent facts or events to maintain
the truthfulness of any warranty.
5.13 Transaction Expenses of WBI and HUBCO.
(a) For planning purposes, WBI shall, within 15
days from the date hereof, provide HUBCO with its estimated budget of
transaction-related expenses reasonably anticipated to be payable by WBI in
connection with this transaction, including the fees and expenses of counsel,
accountants, investment bankers and other professionals. WBI shall promptly
notify HUBCO if or when it determines that it will expect to exceed its budget;
provided, however, that HUBCO acknowledges that WBI shall not be deemed to have
breached this Agreement by virtue of its exceeding such budget.
(b) Promptly after the execution of this Agree-
ment, WBI shall ask all of its attorneys and other professionals to render
current and correct invoices for all unbilled time and disbursements. WBI shall
accrue and/or pay all of such amounts as soon as possible.
(c) WBI shall advise HUBCO monthly of all out-of-
pocket expenses which WBI has incurred in connection with this transaction.
(d) HUBCO, in reasonable consultation with WBI,
shall make all arrangements with respect to the printing and mailing of the
Proxy Statement.
5.14 Indemnification.
(a) For a period of six years after the Effective
Time, HUBCO shall indemnify, defend and hold harmless each person who is now, or
has been at any time prior to the date hereof or who becomes prior to the
Effective Time, a director, officer, employee or agent of WBI or Westport or
serves or has served at the request of WBI or Westport in any capacity with any
other person (collectively, the "Indemnitees") against any and all claims,
damages, liabilities, losses, costs, charges, expenses (including, without
limitation, reasonable costs of investigation, and the reasonable fees and
disbursements of legal counsel and other advisers and experts as incurred),
judgments, fines, penalties and amounts paid in settlement, asserted against,
incurred by or imposed upon any Indemnitee by reason of the fact that he or she
is or was a director, officer, employee or agent of WBI or Westport or serves or
has served at the request of WBI or Westport in any capacity with any other
person, in connection with, arising out of or relating to (i) any threatened,
pending or completed claim, action, suit or proceeding (whether civil, criminal,
administrative or investigative), including, without limitation, any and all
claims, actions, suits, proceedings or investigations by or on
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behalf of or in the right of or against WBI or Westport or any of their
respective affiliates, or by any former (but not any present) shareholder of WBI
(collectively, "Claims"), including, without limitation, any Claim which is
based upon, arises out of or in any way relates to the Merger, this Agreement,
any of the transactions contemplated by this Agreement, the Indemnitee's service
as a member of the Board of Directors of WBI or Westport or of any committee of
WBI's or Westport's Board of Directors, the events leading up to the execution
of this Agreement, any statement, recommendation or solicitation made in
connection therewith or related thereto and any breach of any duty in connection
with any of the foregoing, or (ii) the enforcement of the obligations of HUBCO
set forth in this Section 5.14, in each case to the fullest extent permitted
under any of (x) applicable law, (y) the Certificate of Incorporation of WBI or
Westport, as applicable, or (z) the By-Laws of WBI or Westport, as applicable
(and HUBCO shall also advance expenses as incurred to the fullest extent
permitted under any thereof).
(b) From and after the Effective Time, HUBCO shall
assume and honor any obligation of WBI or Westport immediately prior to the
Effective Time with respect to the indemnification of the Indemnitees arising
out of the Certificate of Incorporation or By-Laws of WBI or Westport as if such
obligations were pursuant to a contract or arrangement between HUBCO and such
Indemnitees.
(c) In the event HUBCO or any of its successors or
assigns (i) reorganizes or consolidates with or merges into or enters into
another business combination transaction with any other person or entity and is
not the resulting, continuing or surviving corporation or entity of such
consolidation, merger or transaction, or (ii) liquidates, dissolves or transfers
all or substantially all of its properties and assets to any person or entity,
then, and in each such case, proper provision shall be made so that the
successors and assigns of HUBCO assume the obligations set forth in this Section
5.14.
(d) HUBCO shall cause WBI's and Westport's officers
and directors to be covered under HUBCO's then current officers' and directors'
liability insurance policy for a period of six years after the Effective Time,
or, in the alternative, to be covered under an extension of WBI's and Westport's
existing officers' and directors' liability insurance policy. However, HUBCO
shall only be required to insure such persons upon terms and for coverages
substantially similar to WBI's and Westport's existing officers' and directors'
liability insurance.
(e) Any Indemnitee wishing to claim indemnifica-
tion under this Section 5.14 shall promptly notify HUBCO upon learning of any
Claim, but the failure to so notify shall not relieve HUBCO of any liability it
may have to such Indemnitee if such failure does not materially prejudice HUBCO.
In the event of
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any Claim (whether arising before or after the Effective Time) as to which
indemnification under this Section 5.14 is applicable, (x) HUBCO shall have the
right to assume the defense thereof and HUBCO shall not be liable to such
Indemnitees for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnitee in connection with the defense thereof,
except that if HUBCO elects not to assume such defense, or counsel for the
Indem- nitees advises that there are issues which raise conflicts of interest
between HUBCO and the Indemnitees, the Indemnitees may retain counsel
satisfactory to them, and HUBCO shall pay the reasonable fees and expenses of
such counsel for the Indemnitees as statements therefor are received; provided,
however, that HUBCO shall be obligated pursuant to this Section 5.14(e) to pay
for only one firm of counsel for all Indemnitees in any jurisdiction with
respect to a matter unless the use of one counsel for multiple Indemnitees would
present such counsel with a conflict of interest that is not waived, and (y) the
Indemnitees will cooperate in the defense of any such matter. HUBCO shall not be
liable for settlement of any claim, action or proceeding hereunder unless such
settlement is effected with its prior written consent. Notwithstanding anything
to the contrary in this Section 5.14, HUBCO shall not have any obligation
hereunder to any Indemnitee when and if a court of competent jurisdiction shall
ultimately determine, and such determination shall have become final and
nonappealable, that the indemnification of such Indemnitee in the manner
contemplated hereby is prohibited by applicable law or public policy.
5.15 Bank Merger. Notwithstanding that WBI believes that it
has established all reserves and taken all provisions for possible loan losses
required by GAAP and applicable laws, rules and regulations, WBI recognizes that
HUBCO may have adopted different loan, accrual and reserve policies (including
loan classifications and levels of reserves for possible loan losses). From and
after the date of this Agreement to the Effective Time and in order to formulate
the plan of integration for the Bank Merger, WBI and HUBCO shall consult and
cooperate with each other with respect to (i) conforming, based upon such
consultation, WBI's loan, accrual and reserve policies to those policies of
HUBCO to the extent appropriate, provided that any required change in WBI's
practices in connection with the matters described in this clause (i) need not
be effected until the parties receive all necessary governmental approvals and
consents to consummate the transactions contemplated hereby, (ii) new extensions
of credit or material revisions to existing terms of credits by Westport, in
each case where the aggregate exposure exceeds $500,000, and (iii) conforming,
based upon such consultation, the composition of the investment portfolio and
overall asset/liability management position of WBI and Westport to the extent
appropriate.
5.16 Compliance with Antitrust Laws. Each of HUBCO and WBI
shall use its reasonable best efforts to resolve such objections, if any, which
may be asserted with respect to the
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Merger under antitrust laws, including, without limitation, the
Hart-Scott-Rodino Act. In the event a suit is threatened or instituted
challenging the Merger as violative of antitrust laws, each of HUBCO and WBI
shall use its reasonable best efforts to avoid the filing of, resist or resolve
such suit. HUBCO and WBI shall use their reasonable best efforts to take such
action as may be required: (a) by the Antitrust Division of the Department of
Justice or the Federal Trade Commission in order to resolve such objections as
either of them may have to the Merger under antitrust laws, or (b) by any
federal or state court of the United States, in any suit brought by a private
party or governmental entity challenging the Merger as violative of antitrust
laws, in order to avoid the entry of, or to effect the dissolution of, any
injunction, temporary restraining order, or other order which has the effect of
preventing the consummation of the Merger. Reasonable best efforts shall
include, but not be limited to, the proffer by HUBCO of its willingness to
accept an order agreeing to the divestiture, or the holding separate, of any
assets of HUBCO or WBI, except to the extent that any such divestitures or
holding separate arrangement would have a material adverse effect on HUBCO. The
entry by a court, in any suit brought by a private party or governmental entity
challenging the Merger as violative of antitrust laws, of an order or decree
permitting the Merger, but requiring that any of the businesses, product lines
or assets of HUBCO or WBI be divested or held separate thereafter shall not be
deemed a failure to satisfy the conditions specified in Section 6.1 hereof
except to the extent that any divestitures or holding separate arrangement would
have a material adverse effect on HUBCO and HUBCO shall not have voluntarily
consented to such divestitures or holding separate arrangements. For the
purposes of this Section 5.16, the divestiture or the holding separate of a
branch or branches of HUBank, the Connecticut Bank or Westport with, in the
aggregate, less than $20 million in assets shall not be considered to have a
material adverse effect on HUBCO.
5.17 Pooling and Tax-Free Reorganization Treatment. Prior to
the date hereof, neither HUBCO or WBI has taken any action or failed to take any
action which would disqualify the Merger for pooling of interests accounting
treatment. Before the Effective Time, neither HUBCO nor WBI shall intentionally
take, fail to take, or cause to be taken or not taken any action within its
control, which would disqualify the Merger as a "pooling-of-interests" for
accounting purposes or as a "reorganization" within the meaning of Section
368(a) of the Code. Subsequent to the Effective Time, HUBCO shall not take and
shall cause the Surviving Corporation not to take any action within their
control that would disqualify the Merger as such a "reorganization" under the
Code.
5.18. Comfort Letters. HUBCO shall cause Arthur Andersen, its
independent public accountants, to deliver to WBI, and WBI shall cause Arthur
Andersen, its independent public accountants, to deliver to HUBCO and to its
officers and directors
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who sign the Registration Statement for this transaction, a short-form "comfort
letter" or "agreed upon procedures" letter, dated the date of the mailing of the
Proxy Statement-Prospectus for the Stockholders Meeting of WBI, in the form
customarily issued by such accountants at such time in transactions of this
type.
5.19. Affiliates. Promptly, but in any event within two weeks,
after the execution and delivery of this Agreement, WBI shall deliver to HUBCO
(a) a letter identifying all persons who, to the knowledge of WBI, may be deemed
to be affiliates of WBI under Rule 145 of the 1933 Act and the
pooling-of-interests accounting rules, including, without limitation, all
directors and executive officers of WBI and (b) copies of letter agreements,
each substantially in the form of Exhibit 5.19-1, executed by each such person
so identified as an affiliate of WBI agreeing to comply with Rule 145 and to
refrain from transferring shares as required by the pooling-of-interests
accounting rules. Within two weeks after the date hereof, HUBCO shall cause its
directors and executive officers to enter into letter agreements in the form of
Exhibit 5.19-2 with HUBCO concerning the pooling-of-interests accounting rules.
HUBCO hereby agrees to publish, or file a Form 8-K, Form 10-K or Form 10-Q
containing financial results covering at least 30 days of post-Merger combined
operations of HUBCO and WBI as soon as practicable (but in no event later than
30 days) following the close of the first calendar month ending 30 days after
the Effective Time, in form and substance sufficient to remove the restrictions
set forth in paragraph "B" of Exhibit 5.19-1.
5.20 Appointments. HUBCO agrees to cause Michael H. Flynn to
be appointed at the Effective Time as President and Chief Executive Officer of
the Connecticut Bank and immediately after the Effective Time to enter into a
new employment agreement with Michael H. Flynn upon terms consistent with this
Agreement but otherwise no less favorable to him than his current agreement if,
prior to the effective date of the Registration Statement Michael H. Flynn
amends in writing his employment agreement so that under no circumstances would
WBI, Westport, HUBCO or any HUBCO Subsidiary be required to make any payments or
provide any benefits to him (upon, or accelerated by, a change in control, as a
consequence of this Agreement or the Merger or otherwise) which, if paid or
provided, would constitute an "excess parachute payment" as defined in Section
280G of the Code. HUBCO agrees to cause David A. Rosow to be appointed at the
Effective Time as Chairman of the Executive Committee of the HUBCO Board of
Directors.
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ARTICLE VI - CLOSING CONDITIONS
6.1 Conditions to Each Party's Obligations Under this
Agreement. The respective obligations of each party under this Agreement to
consummate the Merger shall be subject to the satisfaction, or, where
permissible under applicable law, waiver at or prior to the Effective Time of
the following conditions:
(a) Approval of Stockholders; SEC Registration.
This Agreement and the transactions contemplated hereby shall have been approved
by the requisite vote of the stockholders of WBI and, if necessary under NASDAQ
rules or applicable laws, the stockholders of HUBCO. The HUBCO Registration
Statement and Proxy Statement-Prospectus shall have been declared effective by
the SEC and shall not be subject to a stop order or any threatened stop order,
and the issuance of the HUBCO Stock and the HUBCO Warrants shall have been
qualified in every state where such qualification is required under the
applicable state securities laws.
(b) Regulatory Filings. All necessary regulatory or
governmental approvals and consents (including without limitation any required
approval of the FDIC, the FRB and the Connecticut Commissioner) required to
consummate the transactions contemplated hereby shall have been obtained without
any term or condition which would materially impair the value of WBI and
Westport, taken as a whole, to HUBCO. All conditions required to be satisfied
prior to the Effective Time by the terms of such approvals and consents shall
have been satisfied; and all statutory waiting periods in respect thereof
(including the Hart-Scott-Rodino waiting period if applicable) shall have
expired.
(c) Suits and Proceedings. No order, judgment or
decree shall be outstanding against a party hereto or a third party that would
have the effect of preventing completion of the Merger; no suit, action or other
proceeding shall be pending or threatened by any governmental body in which it
is sought to restrain or prohibit the Merger; and no suit, action or other
proceeding shall be pending before any court or governmental agency in which it
is sought to restrain or prohibit the Merger or obtain other substantial
monetary or other relief against one or more parties hereto in connection with
this Agreement and which HUBCO or WBI determines in good faith, based upon the
advice of their respective counsel, makes it inadvisable to proceed with the
Merger because any such suit, action or proceeding has a significant potential
to be resolved in such a way as to deprive the party electing not to proceed of
any of the material benefits to it of the Merger.
(d) Tax Opinion. HUBCO and WBI shall each have
received an opinion, dated as of the Effective Time, of Pitney, Hardin, Kipp &
Szuch, or of counsel to WBI reasonably acceptable to HUBCO, reasonably
satisfactory in form and substance to WBI and its counsel and to HUBCO, based
upon representation letters reasonably
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required by such counsel, dated on or about the date of such opinion, and such
other facts and representations as counsel may reasonably deem relevant, to the
effect that
(i) the Merger will be treated for federal income tax purposes
as a reorganization qualifying under the provisions of Section
368 of the Code; (ii) no gain or loss will be recognized by
WBI; (iii) no gain or loss will be recognized upon the
exchange of WBI Stock solely for HUBCO Stock; (iv) the basis
of any HUBCO Stock received in exchange for WBI Stock shall
equal the basis of the recipient's WBI Stock surrendered on
the exchange, reduced by the amount of cash received, if any,
on the exchange, and increased by the amount of the gain
recognized, if any, on the exchange (whether characterized as
dividend or capital gain income); and (v) the holding period
for any HUBCO Stock received in exchange for WBI Stock will
include the period during which WBI Stock surrendered on the
exchange was held, provided such stock was held as a capital
asset on the date of the exchange.
(e) Pooling of Interests. HUBCO shall have received
a letter, dated the Closing Date, from its accountants, Arthur Andersen,
reasonably satisfactory to HUBCO and WBI, to the effect that the Merger shall be
qualified to be treated by HUBCO as a pooling-of-interests for accounting
purposes.
6.2 Conditions to the Obligations of HUBCO Under this
Agreement. The obligations of HUBCO under this Agreement shall be further
subject to the satisfaction or waiver, at or prior to the Effective Time, of the
following conditions:
(a) Representations and Warranties; Performance of
Obligations of WBI and Westport. Except for those representations which are made
as of a particular date, the representations and warranties of WBI contained in
this Agreement shall be true and correct in all material respects on the date of
the Closing (the "Closing Date") as though made on and as of the Closing Date.
WBI shall have performed in all material respects the agreements, covenants and
obligations to be performed by it prior to the Closing Date. With respect to any
representation or warranty which as of the Closing Date has required a
supplement or amendment to the WBI Disclosure Schedule to render such
representation or warranty true and correct in all material respects as of the
Closing Date, the representation and warranty shall be deemed true and correct
as of the Closing Date only if (i) the information contained in the supplement
or amendment to the WBI Disclosure Schedule related to events occurring
following the execution of this Agreement and
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(ii) the facts disclosed in such supplement or amendment would not either alone,
or together with any other supplements or amendments to the WBI Disclosure
Schedule, materially adversely affect the representation as to which the
supplement or amendment relates.
(b) Opinion of Counsel. HUBCO shall have received
an opinion of counsel to WBI, dated the Closing Date, in form and substance
reasonably satisfactory to HUBCO, covering the matters customarily covered in
opinions of counsel in transactions of this type.
(c) Certificates. WBI shall have furnished HUBCO
with such certificates of its officers or other documents to evidence
fulfillment of the conditions set forth in this Section 6.2 as HUBCO may
reasonably request.
(d) Connecticut DEP Compliance. With respect to any
Properties which are Establishments under the Connecticut Transfer Act, prior to
the Closing WBI shall have delivered to HUBCO an appropriate Form in form and
content acceptable to the DEP and prior to the Closing shall have fully accrued
on WBI's books and disclosed to HUBCO the entire anticipated costs associated
with any requested or reasonably anticipated clean-up.
(e) Legal Fees. WBI shall have furnished HUBCO with
letters from all attorneys representing WBI and Westport in any matters
confirming that all legal fees have been paid in full for services rendered as
of the Effective Time.
(f) Merger-Related Expenses. WBI shall have
provided HUBCO with an accounting of all merger-related expenses incurred by it
through the Closing Date, including a good faith estimate of such expenses
incurred but as to which invoices have not been submitted as of the Closing
Date. The merger-related expenses of WBI shall be reasonable.
6.3 Conditions to the Obligations of WBI Under this Agreement.
The obligations of WBI under this Agreement shall be further subject to the
satisfaction or waiver, at or prior to the Effective Time, of the following
conditions:
(a) Representations and Warranties; Performance of
Obligations of HUBCO. Except for those representations which are made as of a
particular date, the representations and warranties of HUBCO contained in this
Agreement shall be true and correct in all material respects on the Closing Date
as though made on and as of the Closing Date. HUBCO shall have performed in all
material respects the agreements, covenants and obligations to be performed by
it prior to the Closing Date. With respect to any representation or warranty
which as of the Closing Date has required a supplement or amendment to the HUBCO
Disclosure Schedule to render such representation or warranty true and correct
in all material
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respects as of the Closing Date, the representation and warranty shall be deemed
true and correct as of the Closing Date only if (i) the information contained in
the supplement or amendment to the HUBCO Disclosure Schedule related to events
occurring following the execution of this Agreement and (ii) the facts disclosed
in such supplement or amendment would not either alone, or together with any
other supplements or amendments to the HUBCO Disclosure Schedule, materially
adversely effect the representation as to which the supplement or amendment
relates.
(b) Opinion of Counsel to HUBCO. WBI shall have
received an opinion of counsel to HUBCO, dated the Closing Date, in form and
substance reasonably satisfactory to WBI, covering the matters customarily
covered in opinions of counsel in transactions of this type.
(c) Fairness Opinion. WBI shall have received an
opinion from O & Co., dated no more than three days prior to the date the Proxy
Statement-Prospectus is mailed to WBI's stockholders (and, if it shall become
necessary to resolicit proxies thereafter, dated no more than three days prior
to the date of any substantive amendment to the Proxy Statement/Prospectus) to
the effect that, in its opinion, the consideration to be paid to stockholders of
WBI hereunder is fair to such stockholders from a financial point of view
("Fairness Opinion"), and HUBCO shall not have taken any action (including the
announcement of any other proposed acquisition) which causes O & Co. to withdraw
its Fairness Opinion prior to the Closing.
(d) Certificates. HUBCO shall have furnished WBI
with such certificates of its officers or others and such other documents to
evidence fulfillment of the conditions set forth in this Section 6.3 as WBI may
reasonably request.
(e) Certain Contracts. HUBCO shall have
specifically acknowledged, accepted and assumed (in a document in form and
substance reasonably satisfactory to WBI) any written employment, severance and
other compensation contracts between WBI and its officers and directors
(including former officers and directors) contained in the WBI Disclosure
Schedules in a writing delivered to the officers and directors covered thereby,
unless the employment contract is terminated or, if applicable, the employment
of the officer by WBI is terminated for any reason prior to the Closing, or if
the employment, severance and other contracts have been amended as provided
hereunder HUBCO shall assume the amended written contracts.
(f) Directors and President. Two nominees,
designated by WBI and acceptable to HUBCO (which persons shall be Michael H.
Flynn and David A. Rosow, unless HUBCO and WBI shall agree in writing to the
contrary), shall be duly appointed by the Board of Directors of HUBCO to HUBCO's
Board of Directors,
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effective at the Effective Time. Provision shall have been made such that four
nominees, designated by WBI and acceptable to HUBCO (which persons shall include
Michael H. Flynn and David A. Rosow, unless HUBCO and WBI shall agree in writing
to the contrary), shall have been appointed as directors of the Surviving Bank
(or shall continue as directors of Westport if the Bank Merger is not
consummated at the Effective Time). HUBCO shall have caused Michael H. Flynn to
be elected President of the Connecticut Bank, subject to the condition of
Section 5.20 hereof. HUBCO shall have caused David A. Rosow to be appointed
Chairman of the Executive Committee of the HUBCO Board of Directors.
ARTICLE VII - TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated prior to the
Effective Time, whether before or after approval of this Agreement by the
stockholders of WBI:
(a) by mutual written consent of the parties
hereto;
(b) by HUBCO or WBI (i) if the Effective Time shall
not have occurred on or prior to March 31, 1997 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 to be performed
or observed by such party at or before the Effective Time, or (ii) if a vote of
the stockholders of WBI is taken and such stockholders fail to approve this
Agreement at the meeting (or any adjournment thereof) held for such purpose, or
(iii) if a vote of the stockholders of HUBCO is required by applicable NASDAQ
rules, such vote is taken and such stockholders fail to approve this Agreement
at the meeting (or any adjournment thereof) held for such purpose;
(c) by HUBCO or WBI upon written notice to the
other if any application for regulatory or governmental approval necessary to
consummate the Merger and the other transactions contemplated hereby shall have
been denied or withdrawn at the request or recommendation of the applicable
regulatory agency or Governmental Entity or by HUBCO upon written notice to WBI
if any such application is approved with conditions (other than conditions which
are customary in such regulatory approvals) which materially impair the value of
WBI and Westport, taken as a whole, to HUBCO;
(d) by HUBCO if (i) there shall have occurred a
material adverse change in the business, operations, assets, or financial
condition of WBI and Westport, taken as a whole, from that disclosed by WBI in
WBI's Quarterly Report on Form 10-Q for the three months ended March 31, 1996
(it being understood that those matters disclosed in the WBI Disclosure Schedule
shall not be deemed to constitute such a material adverse change) or (ii) there
was a material breach in any representation, warranty, covenant,
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agreement or obligation of WBI hereunder and such breach shall not have been
remedied within 30 days after receipt by WBI of notice in writing from HUBCO to
WBI specifying the nature of such breach and requesting that it be remedied;
(e) by WBI, if (i) there shall have occurred a
material adverse change in the business, operations, assets or financial
condition of HUBCO and its Subsidiaries taken as a whole from that disclosed by
HUBCO in HUBCO's Quarterly Report on Form 10-Q for the three months ended March
31, 1996 except for the Effects of Announced Acquisitions (it being understood
that those matters disclosed in the HUBCO Disclosure Schedule shall not be
deemed to constitute such a material adverse change); or (ii) there was a
material breach in any representation, warranty, covenant, agreement or
obligation of HUBCO hereunder and such breach shall not have been remedied
within 30 days after receipt by HUBCO of notice in writing from WBI specifying
the nature of such breach and requesting that it be remedied;
(f) by WBI, if WBI's Board of Directors shall have
approved an Acquisition Transaction after determining, upon advice of counsel,
that such approval was necessary in the exercise of its fiduciary obligations
under applicable laws and WBI has paid to HUBCO in full the Termination Fee
specified hereunder in Section 8.1(c) upon the termination of this Agreement;
(g) by HUBCO if the conditions set forth in Section
6.2 are not satisfied and are not capable of being satis- fied by March 31,
1997;
(h) by WBI if the conditions set forth in Section
6.3 are not satisfied and are not capable of being satisfied by March 31, 1997;
or
(i) by WBI, if (either before or after its approval
by the stockholders of WBI) its Board of Directors so determines by a vote of a
majority of the members of its entire Board, at any time during the ten-day
period commencing with the Determination Date, if both of the following
conditions are satisfied:
(1) the HUBCO Common Stock Average Price on
the Determination Date shall be less than $16.75; and
(2) (i) the number obtained by dividing the
HUBCO Common Stock Average Price on such Determination Date by
the Starting Date Closing Price (the "HUBCO Ratio") shall be
less than (ii) the number obtained by dividing the Index Price
on the Determination Date by the Index Price on the Starting
Date and subtracting .075 from the quotient in this clause
(2)(ii) (such number being referred to herein as the "Index
Ratio");
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Notwithstanding the foregoing, if WBI elects to exercise its termination right
pursuant to this subsection (i), it shall give prompt written notice to HUBCO
(provided that such notice of election to terminate may be withdrawn at any time
within the aforementioned ten-day period)). During the seven-day period
commencing with its receipt of such notice, HUBCO shall have the option of
increasing the consideration to be received by the holders of WBI Common Stock
hereunder by increasing the Exchange Ratio to equal the lesser of (i) a number
(rounded to four decimals) equal to a quotient, the numerator of which is $16.75
multiplied by the Exchange Ratio (as then in effect) and the denominator of
which is the HUBCO Common Stock Average Price, and (ii) a number equal to a
quotient, the numerator of which is the Index Ratio multiplied by the Exchange
Ratio (as then in effect) and the denominator of which is the HUBCO Ratio. If
HUBCO makes an election contemplated by the preceding sentence, within such
seven-day period, it shall give prompt written notice to WBI of such election
and the revised Exchange Ratio, whereupon no termination shall have occurred
pursuant to this subsection (i) and this Agreement shall remain in effect in
accordance with its terms (except as the Exchange Ratio shall have been so
modified), and any references in this Agreement to "Exchange Ratio" shall
thereafter be deemed to refer to the Exchange Ratio as adjusted pursuant to this
subsection (i).
For purposes of this subsection (i), the following
terms shall have the meanings indicated:
"HUBCO Common Stock Average Price" means the
average of the daily closing sales prices of HUBCO Common Stock as reported on
NASDAQ (as reported in The Wall Street Journal or, if not reported thereby,
another authoritative source as chosen by HUBCO) for the 20 consecutive full
trading days in which such shares are quoted on NASDAQ ending at the close of
trading on the Determination Date.
"Determination Date" means the date on which the
approval of the FRB required for consummation of the Merger shall be received
or, if no FRB approval is required, then the date of the approval by the FDIC of
the Bank Merger is received.
"Index Price" on a given date means the closing
price of the NASDAQ Bank Index on such date, as reported in The Wall Street
Journal.
"Starting Date" means the first NASDAQ trading day
immediately following the date of the first public announcement of the entry
into this Agreement.
7.2 Effect of Termination. In the event of the termin- ation
and abandonment of this Agreement by either HUBCO or WBI pursuant to Section
7.1, this Agreement (other than Section 5.5(b),
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the penultimate sentence of Section 5.6(h), this Section 7.2 and Section 8.1)
shall forthwith become void and have no effect, without any liability on the
part of any party or its officers, directors or stockholders. Nothing contained
herein, however, shall relieve any party from any liability for any breach of
this Agreement.
7.3 Amendment. This Agreement may be amended by action taken
by the parties hereto at any time before or after adoption of this Agreement by
the stockholders of WBI but, after any such adoption, no amendment shall be made
which reduces or changes the amount or form of the consideration to be delivered
to the shareholders of WBI without the approval of such stockholders. This
Agreement may not be amended except by an instrument in writing signed on behalf
of all the parties hereto.
7.4 Extension; Waiver. The parties may, at any time prior to
the Effective Time of the Merger, (i) extend the time for the performance of any
of the obligations or other acts of the other parties hereto; (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant thereto; or (iii) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of any
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party against which the waiver is
sought to be enforced.
ARTICLE VIII - MISCELLANEOUS
8.1 Expenses.
(a) Except as otherwise expressly stated herein,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby (including legal, accounting and investment
banking fees and expenses) shall be borne by the party incurring such costs and
expenses. Notwithstanding the foregoing, WBI may bear the expenses of Westport.
(b) Notwithstanding any provision in this Agree-
ment to the contrary, in the event that either of the parties shall willfully
default in its obligations hereunder, the non-defaulting party may pursue any
remedy available at law or in equity to enforce its rights and shall be paid by
the willfully defaulting party for all damages, costs and expenses, including
without limitation legal, accounting, investment banking and printing expenses,
incurred or suffered by the non-defaulting party in connection herewith or in
the enforcement of its rights hereunder.
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(c) If
(i) this Agreement is terminated by WBI
pursuant to Section 7.1(f), or
(ii) this Agreement is terminated: (ww) by
HUBCO pursuant to Section 7.1(d)(ii) because of a breach by
WBI of any covenant, or (xx) by HUBCO pursuant to Section
7.1(b)(ii) because of an action taken by WBI or WBI's Board of
Directors, or (yy) by HUBCO following a withdrawal by O & Co.
of its Fairness Opinion prior to the Closing, or (zz) by WBI,
other than pursuant to Section 7.1(a), Section 7.1(b)(i) if
before October 1, 1996 WBI has satisfied all conditions in
Section 6.2 (other than any requirement of WBI stockholder
approval or any condition waived by HUBCO), Section 7.1(b)(ii)
unless either (A) the failure of the WBI stockholders to
approve the Agreement is attributable to an action or omission
of WBI or WBI's Board of Directors or (B) a proposal to effect
an Acquisition Transaction was made public before the meeting
of stockholders referred to in Section 7.1(b)(ii), Section
7.1(c), Section 7.1(e), Section 7.1(f), Section 7.1(h) or
Section 7.1(i), and
a) after the execution of this Agreement
and prior to the date of termination of this
Agreement WBI is informed orally or in writing of a
proposal to effect an Acquisition Transaction which
proposal is not fully withdrawn prior to the date
of termination and which proposal is made by a
company or person other than HUBCO and its
affiliates; and
b) before or within 12 months after the
date of the termination of this Agreement (x) WBI
shall have entered into an agreement to engage in
an Acquisition Transaction with any person other
than HUBCO, or (y) the Board of Directors of WBI
shall have approved an Acquisition Transaction or
shall have recommended that the shareholders of WBI
approve or accept any Acquisition Transaction, in
each case, other than as contemplated by this
Agreement, and
c) an Acquisition Transaction between
WBI and another person shall have closed
("Acquisition Transaction Closing") within 24
months after the termination of this Agreement;
then WBI or its successor in interest shall pay to HUBCO as a condition to a
termination under clause (i) above or under clause (ii) above as a condition to
and simultaneous with the Acquisition
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Transaction Closing, a termination fee (the "Termination Fee") equal to
$3,000,000 (THREE MILLION DOLLARS), plus the legal fees and expenses of HUBCO
incurred in enforcing its right to the Termination Fee.
8.2 Survival. The respective representations, warran- ties,
covenants and agreements of the parties to this Agreement shall not survive the
Effective Time, but shall terminate as of the Effective Time, except for Article
II, this Section 8.2 and Sections 5.5(b), 5.11 and 5.14.
8.3 Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or by reputable overnight courier or sent by registered or certified
mail, postage prepaid, as follows:
(a) If to HUBCO, to:
HUBCO, Inc.
1000 MacArthur Blvd.
Mahwah, New Jersey 07430
Attn.: Kenneth T. Neilson, Chairman,
President and Chief Executive Officer
Copy to: 1000 MacArthur Blvd.
Mahwah, New Jersey 07430
Attn.: D. Lynn Van Borkulo-Nuzzo, Esq.
And copy to: Pitney, Hardin, Kipp & Szuch
(Delivery) 200 Campus Drive
Florham Park, New Jersey
(Mail) P.O. Box 1945
Morristown, New Jersey 07962-1945
Attn.: Michael W. Zelenty, Esq.
(b) If to WBI or Westport, to:
Westport Bancorp, Inc.
87 Post Road East
Westport, Connecticut 06880
Attn.: Michael H. Flynn, President
and Chief Executive Officer
Copy to: Hogan & Hartson, L.L.P.
Columbia Square
555 Thirteenth Street, N.W.
Washington, D.C. 20004-1109
Attn.: Stuart G. Stein, Esq.
or such other addresses as shall be furnished in writing by any party, and any
such notice or communications shall be deemed to have been given as of the date
actually received.
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8.4 Parties in Interest; Assignability. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Nothing in this Agreement is intended to
confer, expressly or by implication, upon any other person any rights or
remedies under or by reason of this Agreement except the Indemnitees described
in Section 5.14. This Agreement and the rights and obligations of the parties
hereunder may not be assigned.
8.5 Entire Agreement. This Agreement, which includes the
Disclosure Schedules hereto and the other documents, agreements and instruments
executed and delivered pursuant to or in connection with this Agreement,
contains the entire Agreement between the parties hereto with respect to the
transactions contemplated by this Agreement and supersedes all prior
negotiations, arrangements or understandings, written or oral, with respect
thereto, other than any confidentiality agreements entered into by the parties
hereto.
8.6 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and each of which shall be deemed an original.
8.7 Governing Law. This Agreement shall be governed by the
laws of the State of New Jersey, without giving effect to the principles of
conflicts of laws thereof.
8.8 Descriptive Headings. The descriptive headings of this
Agreement are for convenience only and shall not control or affect the meaning
or construction of any provision of this Agree- ment.
8.9 Knowledge. Representations made herein which are qualified
by the phrase to the best of WBI's knowledge or similar phrases refer as of the
date hereof to the best knowledge of the Chief Executive Officer, the Chief
Financial Officer and the person serving in the capacity of chief lending
officer of WBI and thereafter refer to the best knowledge of any senior officer
of WBI or any WBI Subsidiary. Representations made herein which are qualified by
the phrase to the best of HUBCO's knowledge or similar phrases refer as of the
date hereof to the best of the knowledge of the Chairman, President and Chief
Executive Officer, the Executive Vice President/Legal and the Chief Financial
Officer of HUBCO and thereafter refer to the best knowledge of any senior
officer of HUBCO or any HUBCO Subsidiary. Any reference to a person's knowledge
or best knowledge shall mean, as of the date of the statement in question, such
person's actual knowledge or what such person should have known in the ordinary
exercise of that person's duties in the capacity referred to herein.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, HUBCO, WBI and Westport have caused this
Agreement to be executed by their duly authorized officers and by no less than a
majority of the directors of each of them as of the day and year first above
written.
ATTEST: HUBCO, INC.
By:/s/D. Lynn Van Borkulo-Nuzzo By: /s/ Kenneth T. Neilson
---------------------------- -----------------------
D. Lynn Van Borkulo-Nuzzo, Kenneth T. Neilson, Chairman,
Secretary President and Chief Executive
Officer
ATTEST: WESTPORT BANCORP, INC.
By:/s/ John J. Henchy By: /s/ Michael H. Flynn
---------------------------- -----------------------
John J. Henchy, Michael H. Flynn, President
Secretary and Chief Executive Officer
ATTEST: THE WESTPORT BANK & TRUST COMPANY
By:/s/ John J. Henchy By: /s/ Michael H. Flynn
---------------------------- -----------------------
John J. Henchy, Michael H. Flynn, President
Secretary and Chief Executive Officer
DIRECTORS OF WESTPORT BANCORP, INC. and
THE WESTPORT BANK & TRUST COMPANY:
/s/ Jay Sherwood /s/ William L. Gault
- --------------------------- ------------------------------
/s/ William D. Ruekert /s/ Kurt B. Hersher
- --------------------------- ------------------------------
/s/ Michael H. Flynn /s/ William E. Mitchell
- --------------------------- ------------------------------
/s/ David A. Rosow /s/ George H. Damman
- --------------------------- ------------------------------
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DIRECTORS OF HUBCO, INC.:
/s/Joan David /s/Kenneth T. Neilson
- --------------------------- ------------------------------
/s/XXXXX
- --------------------------- ------------------------------
/s/Robert J. Burke
- --------------------------- ------------------------------
/s/Charles F. X. Poggi
- --------------------------- ------------------------------
/s/James E. Schierloh
- --------------------------- ------------------------------
/s/W. Peter McBride
- --------------------------- ------------------------------
<PAGE>
CERTIFICATE OF WBI AND WESTPORT DIRECTORS
Reference is made to the Agreement and Plan of Merger, dated
June 21, 1996 (the "Agreement"), among HUBCO, Inc., Westport Bancorp, Inc., and
The Westport Bank & Trust Company. Capitalized terms used herein have the
meanings given to them in the Agreement.
Each of the following persons, being all of the directors of
WBI and Westport, agrees to vote or cause to be voted all shares of WBI Stock
which are held by such person, or over which such person exercises full voting
control (except as trustee or in a fiduciary capacity, or as nominee), in favor
of the Merger.
/s/ Jay Sherwood /s/ William L. Gault
- --------------------------- -----------------------------------
/s/ William D. Ruekert /s/ Kurt B. Hersher
- --------------------------- -----------------------------------
/s/ Michael H. Flynn /s/ William E. Mitchell
- --------------------------- -----------------------------------
/s/ David A. Rosow /s/ George H. Damman
- --------------------------- -----------------------------------
Dated: June 21, 1996
<PAGE>
EXHIBIT 2.1(a)
ARTICLE V
SECTION D-SERIES B PREFERRED STOCK
(C) The Series B Preferred Stock, shall have a stated value of $100.00
per share, and the shares therefore, when issued for such amount, shall be fully
paid and non-assessable. The Series B Preferred Stock shall consist of _______
shares, which number may be increased (but only in connection with a stock split
or stock dividend) or decreased from time to time (but not below the number
thereof then outstanding) by the Board of Directors. Upon the reacquisition of
any of the Series B Preferred Stock, through conversion or otherwise, such
reacquired Shares shall be canceled and shall become part of the authorized and
unissued Preferred Stock, but shall not be authorized and unissued Series B
Preferred Stock. The rights, preferences and limitations of the Series B
Preferred Stock are as follows:
(a) Rank. The Series B Preferred Stock shall, with respect to
rights on liquidation, winding up and dissolution of the Corporation, rank prior
to the Common Stock and to all other classes and series of equity securities of
the Corporation now or hereafter authorized, issued or outstanding, other than
any class or series of equity securities ranking on a parity with the Series B
Preferred Stock (the "Parity Stock"), or any class or series of equity
securities of the Corporation ranking senior to the Series B Preferred Stock as
to rights upon liquidation (the "Senior Stock"). The Series B Preferred Stock
shall be junior to all outstanding debt of the Corporation. The Series B
Preferred Stock shall be subject to creation of Senior Stock, Parity Stock and
classes or series of equity securities ranking junior to the Series B Preferred
Stock (the "Junior Stock").
(b) Dividends. Holders of record of Series B Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of the funds of the Corporation legally available therefore,
dividends at a rate to be determined by the Corporation's Board of Directors.
All dividends declared on the Series B Preferred Stock shall be declared pro
rata per share and shall be noncumulative. All dividends declared shall be
payable to holders of record of the Series B Preferred Stock as they appear at
the close of business on the stock books of the Corporation on record dates
determined by the Board of Directors, not more than 60 calendar days preceding
the date on which such dividends are payable.
(c) Liquidation Preference. The amount which the holders of
shares of Series B Preferred Stock shall be entitled to receive, subject to the
rights of creditors, in the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, shall be $100.00 per
share. Upon any
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such liquidation, dissolution or winding up, the preferential amounts with
respect to the Series B Preferred Stock and any Parity Stock shall be
distributed pro rata in accordance with the aggregate preferential amounts of
the Series B Preferred Stock and such Parity Stock, if any, out of or to the
extent of the net assets of the Corporation legally available for such
distribution, before any distributions are made with respect to any Junior
Stock.
(d) Redemption. The Series B Preferred Stock is not subject to
any redemption rights on the part of the Corporation, nor shall the holders of
the Series B Preferred Stock have the right to require the Corporation to redeem
their shares.
(e) Conversion.
(i) At the Option of the Holder. At the option of
each of the holders of outstanding Series B Preferred Stock, such stock may be
converted into the fully paid and nonassessable shares of Common Stock as
provided for in this Paragraph (e). As used in this Paragraph (e), Common Stock
means (A) the Common Stock, no par value, of the Corporation, as authorized by
this Certificate of Incorporation, and (B) any other class of capital stock into
which such Common Stock has been changed pursuant to any reclassification or
reorganization.
(ii) Conversion Ratio. The Series B Preferred Stock
may be converted into Common Stock at the conversion rate in effect at the
"Conversion Date" (as defined below). On and after ________, 199_, the
conversion rate shall be 32.25 shares of Common Stock for each share of Series B
Preferred Stock converted (the "Conversion Ratio"). The Conversion Ratio shall
be subject to adjustment from time to time, as provided in Subparagraph (iv) of
this Paragraph (e).
(iii) Certain Transactions. In case of any
consolidation or merger to which the Corporation is a party, other than a merger
or consolidation in which the Corporation is the continuing corporation, or in
case of any sale or conveyance to another corporation of the property of the
Corporation as an entirety or substantially as an entirety, or in case of any
statutory exchange of securities with another corporation, there will be no
adjustment of the Conversion Ratio, but each holder of shares of Series B
Preferred Stock then outstanding will have the right thereafter to convert such
shares into the kind and amount of securities, cash or other property which such
holder would have owned or have been entitled to receive immediately after such
consolidation, merger, statutory exchange, sale or conveyance had such shares
been converted immediately prior to the effective date of such consolidation,
merger, statutory exchange, sale or conveyance.
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(iv) Adjustment of Conversion Ratio. The Conversion
Ratio is subject to adjustment, upon certain events, including the issuance of
Common Stock of the Corporation as a dividend with respect to the outstanding
Common Stock, subdivisions or combinations of Common Stock, the issuance to
holders of Common Stock generally of rights or warrants to subscribe for Common
Stock, or the distribution to holders of Common Stock generally of evidences of
indebtedness, assets (excluding dividends in cash out of retained earnings) or
rights or warrants to subscribe for securities of the Corporation other than
those mentioned above. The adjustments required by this Subparagraph (iv) shall
be made whenever and as often as any specified event requiring an adjustment
shall occur, except that no adjustment of the number of shares of Common Stock
into which each share of Series B Preferred Stock is convertible that would
otherwise be required shall be made (except in the case of a subdivision or
combination of shares of the Common Stock, as provided for in Subparagraph
(iii)) unless and until such adjustment, either by itself or with other
adjustments not previously made, adds or subtracts at least five percent (5%) to
or from the number of shares of Common Stock into which each share of Series B
Preferred Stock is convertible immediately prior to the making of such
adjustment. Any adjustment representing a change of less than such minimum
amount (except as aforesaid) shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Subparagraph (iv)
and not previously made, would result in a minimum adjustment. For the purpose
of any adjustment, any specified event shall be deemed to have occurred at the
close of business on the date of its occurrence. Each adjustment in the
Conversion Ratio pursuant to this Subparagraph (iv) shall become effective as of
either (A) the record date for the payment of such dividend, or (B) the
effective date of any such subdivision or combination. Notwithstanding the
foregoing, the Conversion Ratio shall not be subject to adjustment to the extent
the Corporation issues any Common Stock in connection with (x) the exercise of
stock purchase rights pursuant to Warrant Certificates issued __________, 199___
by the Corporation in exchange for warrants previously exchangeable for shares
of the common stock of Westport Bancorp, Inc.; and (y) any employee compensation
and benefit plans, employee agreements and contracts. No adjustment in the
Conversion Ratio for the Series B Preferred Stock shall be made if, at the same
time that the Corporation takes an action with respect to the Common Stock that
would otherwise require adjustment under this Subparagraph (iv), the Corporation
shall take the same action with respect to the Series B Preferred Stock in the
same proportion as if each share of Series B Preferred Stock had been converted
into shares of Common Stock at the then applicable Conversion Ratio immediately
before the record date for the determination of holders of Common Stock entitled
to receive the dividends, rights, warrants, or distributions. Whenever the
Conversion Ratio is adjusted as provided in this Subparagraph (iv), the
Corporation shall promptly file with the Transfer Agent for the Series B
Preferred Stock a statement signed by the Chairman of the
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Board, President or Vice President of the Corporation and by its Treasurer or
its Secretary showing in detail the facts requiring such adjustment, and shall
exhibit the statement to any holder of Series B Preferred Stock desiring to
inspect the statement. In addition, with respect to adjustments made while any
Series B Preferred Stock is outstanding, the Corporation shall state to the
Transfer Agent and in the next quarterly and annual report to shareholders that
an adjustment has been effected and give the adjusted Conversion Ratio. Such
quarterly and annual report shall be mailed to all holders of record of the
Series B Preferred Stock on the record date used for mailing such quarterly and
annual report to holders of Common Stock.
(v) Conversion Procedure. The Series B Preferred
Stock may be converted by (A) surrendering the certificates representing the
shares of such Series B Preferred Stock, together with (B) written notice of
conversion, and (C) a proper assignment of such certificates to the Corporation
or in blank. The notice of conversion shall state the name(s) and address(es) in
which the certificates representing the Common Stock issuable upon such
conversion shall be issued. The date upon which the certificates representing
the shares to be converted, the notice of conversion and the assignment are
received by the transfer agent is referred to herein as the "Conversion Date."
As promptly as practicable after the Conversion Date, the Corporation shall
issue and deliver, as specified in the notice of conversion, certificate(s) for
the number of full shares of Common Stock (or other shares of capital stock,
other securities, cash or other property) issuable upon such conversion,
together with any cash instead of fractional shares as provided in Subparagraph
(vi) below. Such conversion shall be deemed to have been effected immediately
prior to the close of business on the Conversion Date, and at such time the
rights of the holder as a holder of the converted shares of the Series B
Preferred Stock shall cease and the person or persons in whose names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares of Common Stock represented thereby.
(vi) Cash Adjustment. No fractional shares of Common
Stock (or other shares of stock or other securities) or scrip representing
fractional shares shall be issued upon conversion of the Series B Preferred
Stock. Instead, the Corporation shall pay a cash adjustment in an amount equal
to the same fraction of the current market price per share of the Common Stock
(or other shares of capital stock or other securities) at the Conversion Date.
As used in this Subparagraph (vi), the term "current market price" at any time
means the daily average closing price for a period of thirty business days
ending on the business day before the date for which such price is to be
determined. The closing price for each business day will be either (A) the last
sale price as quoted on the principal national securities exchange
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upon which the Common Stock (or other capital stock or securities) is listed or
admitted to trading, or, (B) if the Common Stock (or other capital stock or
securities) is not so listed or admitted, the average of the closing bid and
asked prices as quoted on the National Association of Securities Dealers
Automated Quotation System. If, for any reason, such closing prices cannot
reasonably be determined, then the current market price will be determined by
any reasonable method selected by the Board of Directors of the Corporation.
(vii) Corporation to Reserve Stock for Conversion. As
long as any Series B Preferred Stock remains outstanding, the Corporation shall
reserve out of its authorized but unissued Common Stock the full number of
shares of Common Stock deliverable upon the conversion of all outstanding Series
B Preferred Stock.
(f) Voting Rights.
(i) Number of Votes. Holders of shares of Series B
Preferred Stock shall vote together as a class with holders of the Common Stock
for the election of directors and all other matters as to which holders of the
Common Stock shall be entitled to vote. Each share of Series B Preferred Stock
shall be entitled to 32.25 votes, which represents a number of votes equal to
the number of shares of Common Stock into which the Series B Preferred Stock is
convertible and which number is subject to adjustment pursuant to Subparagraph
(e)(iv).
(ii) Additional Voting Rights. In addition, the
approval of a majority of the outstanding shares of Series B Preferred Stock,
voted together as a class, shall be required in order to amend the Certificate
of Incorporation of the Corporation to affect adversely the rights of the
holders of the Series B Preferred Stock or to take any action which would result
in the creation of or an increase in the number of authorized shares senior or
superior with respect to dividends or upon liquidation to the Series B Preferred
Stock. Subject to the foregoing, the Corporation's Certificate of Incorporation
may be amended to increase the number of authorized shares of Parity Stock or
Junior Stock without the vote by class of the holders of the outstanding Series
B Preferred Stock.
<PAGE>
EXHIBIT 5.19-1
FORM OF WBI AFFILIATE LETTER
June __, 1996
HUBCO, Inc.
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
Gentlemen:
I am delivering this letter to you in connection with the
proposed acquisition (the "Merger") of Westport Bancorp, Inc. (the "Company"),
by HUBCO, Inc., a New Jersey corporation and registered bank holding company
("HUBCO"), pursuant to the Agreement and Plan of Merger dated as of June 21,
1996 (the "Agreement") between the Company, its bank and trust company
subsidiary, and HUBCO. Capitalized terms used herein and not otherwise defined
have the meanings assigned to them in the Agreement. I currently own shares of
WBI Common Stock and/or shares of WBI Preferred Stock. As a result of the
Merger, I will receive shares of HUBCO Common Stock in exchange for my WBI
Common Stock and I will receive shares of New HUBCO Preferred Stock in exchange
for my WBI Preferred Stock.
I have been advised that as of the date of this letter I may
be deemed to be an "affiliate" of the Company, as the term "affiliate" is
defined for purposes of paragraphs (c) and (d) of Rule 145 of the rules and
regulations promulgated under the Securities Act of 1933, as amended (the "1933
Act") by the Securities and Exchange Commission ("SEC") and as the term
"affiliate" is used for purposes of the SEC's rules and regulations applicable
to the determination of whether a merger can be accounted for as a "pooling of
interests" as specified in the SEC's Accounting Series Release 135, as amended
by Staff Accounting Bulletins Nos. 65 and 76 ("ASR 135").
I represent to and agree with HUBCO that:
A. Transfer Review Restrictions. During the period beginning
on the date hereof and ending 30 days prior to the consummation of the Merger, I
shall not sell, transfer, reduce my risk with respect to or otherwise dispose of
("transfer") any WBI Stock owned by me, and I shall not permit any relative who
shares my home, or any person or entity who or which I control, to transfer any
WBI Stock owned by such person or entity, without notifying HUBCO in advance of
the proposed transfer and giving HUBCO a reasonable opportunity to review the
transfer before it is consummated. HUBCO, if advised to do so by its independent
public accountants, may instruct me not to make or permit the transfer because
it may interfere with the "pooling of interests" treatment of the Merger. I
shall abide by any such instructions.
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B. Transfer Restrictions During Merger Consummation Period. I
shall not transfer any WBI Stock owned by me, and I shall not permit any
relative who shares my home, or any person or entity who or which I control, to
transfer any WBI Stock owned by such person or entity during the period
beginning 30 days prior to the consummation of the Merger and ending immediately
after financial results covering at least 30 days of post-Merger combined
operations have been published by HUBCO by means of the filing of a Form 10-Q or
Form 8-K under the Securities Exchange Act of 1934, as amended, the issuance of
a quarterly earnings report, or any other public issuance which satisfies the
requirements of ASR 135. For purposes of this paragraph only, "WBI Stock"
includes HUBCO Common Stock or New HUBCO Preferred Stock into which my WBI
Common Stock or WBI Preferred Stock is converted.
C. Compliance with Rule 145. I have been advised that the
issuance of HUBCO Common Stock and/or New HUBCO Preferred Stock to me pursuant
to the Merger will be registered with the SEC under the 1933 Act on a
Registration Statement on Form S-4. However, I have also been advised that,
since I may be deemed to be an affiliate of the Company at the time the Merger
is submitted for a vote of the Company's stockholders, any transfer by me of
HUBCO Common Stock and/or New HUBCO Preferred Stock is restricted under Rule 145
promulgated by the SEC under the 1933 Act. I agree not to transfer any HUBCO
Common Stock or New HUBCO Preferred Stock received by me or any of my affiliates
unless (i) such transfer is made in conformity with the volume and other
limitations of Rule 145 promulgated by the SEC under the 1933 Act, (ii) in the
opinion of HUBCO's counsel or counsel reasonably acceptable to HUBCO, such
transfer is otherwise exempt from registration under the 1933 Act or (iii) such
transfer is registered under the 1933 Act.
D. Stop Transfer Instructions; Legend on Certificates. I also
understand and agree that stop transfer instructions will be given to HUBCO's
transfer agents with respect to the HUBCO Common Stock and/or New HUBCO
Preferred Stock received by me and any of my affiliates and that there will be
placed on the certificates of the HUBCO Common Stock and/or New HUBCO Preferred
Stock issued to me and any of my affiliates, or any substitutions therefor, a
legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF
1933 APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE
TRANSFERRED IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT DATED JUNE __,
1996 BETWEEN THE REGISTERED HOLDER HEREOF AND HUBCO, INC., A COPY OF
WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF HUBCO, INC."
E. Consultation with Counsel. I have carefully read this
letter and the Agreement and discussed the requirements of such documents and
other applicable limitations upon my ability to
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<PAGE>
transfer HUBCO Common Stock and New HUBCO Preferred Stock to the extent I felt
necessary with my counsel or counsel for the Company.
Execution of this letter is not an admission on my part that I
am an "affiliate" of the Company as described in the second paragraph of this
letter, or a waiver of any rights I may have to object to any claim that I am
such an affiliate on or after the date of this letter. This letter shall
terminate concurrently with any termination of the Agreement in accordance with
its terms.
Very truly yours,
-----------------------------
Name:
Accepted this _____
day of June, 1996 by
HUBCO, INC.
By: ______________________________
Name:
Title:
<PAGE>
EXHIBIT 5.19-2
FORM OF AFFILIATE LETTER FOR HUBCO AFFILIATES
_______________ ___, 1996
HUBCO, Inc.
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
Gentlemen:
I am delivering this letter to you in connection with the
proposed merger (the "Merger") of Westport Bancorp, Inc. ("WBI") with and into
HUBCO, Inc., a New Jersey corporation and registered bank holding company
("HUBCO"), pursuant to the Agreement and Plan of Merger dated as of June 21,
1996 (the "Agreement") between WBI, its bank and trust company subsidiary, and
HUBCO. I currently own shares of HUBCO's common stock, no par value ("HUBCO
Common Stock").
I have been advised that as of the date of this letter I may
be deemed to be an "affiliate" of HUBCO, as the term "affiliate" is used for
purposes of the rules and regulations of the Securities and Exchange Commission
(the "Commission") applicable to the determination of whether a merger can be
accounted for as a "pooling of interests" as specified in the Commission's
Accounting Series Release 135, as amended by Staff Accounting Bulletins Nos. 65
and 76 ("ASR 135").
I represent and covenant with HUBCO and WBI that:
A. Transfer Restrictions Prior to Merger Consummation. During
the period beginning on the date hereof and ending 30 days prior to the
consummation of the Merger, I shall not sell, transfer, reduce my risk with
respect to or otherwise dispose of ("transfer") any HUBCO Common Stock owned by
me, and I shall not permit any relative who shares my home, or any person or
entity who or which I control, from transferring any HUBCO Common Stock owned by
such person or entity, without notifying HUBCO in advance of the proposed
transfer and giving HUBCO a reasonable opportunity to object to the transfer
before it is consummated. HUBCO, upon advice of its independent public
accountants, may instruct me not to make or permit the transfer because it may
interfere with the "pooling of interests" treatment of the Merger. I shall abide
by any such instructions.
B. Post-Consummation Transfer Restrictions. During the period
beginning 30 days prior to the consummation of the Merger and ending immediately
after financial results covering at least 30 days of post-Merger combined
operations have been published by
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<PAGE>
HUBCO by means of filing of a Form 10-Q or Form 8-K under the Securities
Exchange Act of 1934, the issuance of a quarterly earnings report, or any other
public issuance which satisfies the requirements of ASR 135, I shall not
transfer any HUBCO Common Stock owned by me, and I shall not permit any relative
who shares my home, or any person or entity who or which I control, to transfer
any HUBCO Common Stock owned by such person or entity.
C. Consultation with Counsel. I have carefully read this
letter and the Agreement and discussed the requirements of such documents and
other applicable limitations upon my ability to transfer HUBCO Common Stock to
the extent I felt necessary with my counsel or counsel for HUBCO.
Execution of this letter is not an admission on my part that I
am an "affiliate" of HUBCO as described in the second paragraph of this letter,
or a waiver of any rights I may have to object to any claim that I am such an
affiliate on or after the date of this letter. This letter shall terminate
concurrently with any termination of the Agreement in accordance with its terms.
Very truly yours,
-------------------------------------
Name:
Title:
Accepted this ____ day of
________________, 1996 by
HUBCO, INC.
By: ________________________________
Name:
Title:
