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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
October 15, 1996
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Independence Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
New Jersey 0-14129 22-2483513
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1100 Lake Street, Ramsey, New Jersey 07466
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 825-1000
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Item 5. Other Events.
On October 15, 1996, Independence Bancorp ("Independence") entered into an
Agreement and Plan of Reorganization (the "Merger Agreement") with Commerce
Bancorp ("Commerce") pursuant to which Independence will be merged with and into
Commerce. Pursuant to the merger, each share of Independence common stock will
be exchanged for .935 shares of Commerce common stock, subject to certain
adjustments provided for in the Merger Agreement. The transaction will be
structured as a tax free merger to be accounted for as a pooling of interests.
In connection with the Agreement, Independence granted Commerce an option to
acquire up to 564,910 shares of Independence authorized but unissued common
stock at a price of $21.00 per share, subject to certain adjustments and
exercisable under certain circumstances. Consummation of the transaction is
subject to certain customary conditions provided for in the Merger Agreement,
including the approval of Independence shareholders and all necessary bank
regulatory agencies. The above description of the Merger Agreement and the Stock
Option Agreement are qualified in their entirety by reference to the Merger
Agreement and the stock option, which are annexed as Exhibits to this Form 8-K.
Item 7. Exhibits
(2.1) Agreement and Plan of Reorganization, dated October 15,
1996, by and between Commerce Bancorp, Inc. and
Independence Bancorp, Inc.
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(2.2) Agreement and Plan of Merger dated October 15, 1996 by
and between Commerce Bancorp, Inc. and Independence
Bancorp, Inc.
(10.1) Stock Option Agreement dated as of October 15, 1996 by
and between Independence Bancorp, Inc. and Commerce
Bancorp, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Independence Bancorp, Inc. has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
INDEPENDENCE BANCORP, INC.
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(Registrant)
Dated: October 24, 1996 By: /s/ JAMES R. NAPOLITANO
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James R. Napolitano,
Chairman of the Board
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EXHIBIT INDEX
CURRENT REPORT ON FORM 8-K
Exhibit No. Description
(2.1) Agreement and Plan of Reorganization, dated October 15,
1996, by and between Commerce Bancorp, Inc. and
Independence Bancorp, Inc.
(2.2) Agreement and Plan of Merger dated October 15, 1996 by
and between Commerce Bancorp, Inc. and Independence
Bancorp, Inc.
(10.1) Stock Option Agreement dated as of October 15, 1996 by
and between Independence Bancorp, Inc. and Commerce
Bancorp, Inc.
AGREEMENT AND
PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated October 15, 1996 by and between
COMMERCE BANCORP, INC. ("CBI"), a New Jersey business corporation registered as
a bank holding company under the Bank Holding Company Act of 1956, as amended
("Holding Company Act"), and INDEPENDENCE BANCORP, INC. ("IBI"), a New Jersey
business corporation registered as a bank holding company under the Holding
Company Act.
BACKGROUND
The Board of Directors of CBI has determined to merge IBI with and into
CBI (hereinafter referred to as the "Merger") in accordance with the provisions
of the New Jersey Business Corporation Act, as amended ("BCA"), and the terms
and conditions of the Agreement and Plan of Merger of even date herewith between
IBI and CBI (the "Merger Agreement") in the form of Exhibit "A" attached hereto.
The Board of Directors of IBI has determined that IBI be merged with and
into CBI in accordance with the provisions of the BCA and the Merger Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, agreements and
provisions contained herein and subject to the satisfaction of the terms and
conditions set forth herein and the Merger Agreement, intending to be legally
bound hereby, CBI and IBI agree as follows:
1. THE MERGER
(a) Subject to the provisions of this Agreement and the Merger
Agreement, IBI will be merged with and into CBI. CBI agrees to issue shares of
CBI's common stock, par value $1.5625 per share, to the shareholders of IBI, on
the Effective Date (as hereinafter defined) of the Merger, in exchange for the
outstanding shares of IBI's common stock, par value $1.667 per share, as
provided in this Agreement and in the Merger Agreement and to abide and comply
with all of the other terms and conditions set forth in the Merger Agreement.
(b) Upon consummation of the Merger, CBI shall initially maintain
Independence Bank of New Jersey ("Independence Bank") as a separate subsidiary
operating under the name "Commerce Bank-North."
2. EFFECTIVE DATE
The "Effective Date" shall be the date and time at which an executed
Certificate of Merger is duly filed with the New Jersey Secretary of State in
accordance with Chapter 10 of the BCA.
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3. REPRESENTATIONS AND WARRANTIES OF IBI
IBI represents and warrants to CBI and agrees as follows:
3.1 IBI is a corporation duly organized under the BCA and is validly
existing and in good standing under the laws of the State of New Jersey.
Independence Bank is a banking corporation duly organized under the New Jersey
Banking Act of 1948, as amended and is validly existing and in good standing
under the laws of the State of New Jersey. Except as set forth in the IBI Annual
Report on Form 10-K for the fiscal year ended December 31, 1995 ("IBI Form
10-K"), IBI has no material subsidiaries except Independence Bank and neither
Independence Bank nor any other subsidiary of IBI has any material subsidiaries.
All references to "IBI" hereinafter contained in Section 3 of this Agreement
shall be deemed to include IBI, Independence Bank and all of the subsidiaries of
either.
3.2 The authorized capital stock of IBI consists of (i) 1,000,000
shares of preferred stock, no par value per share (the "IBI Preferred Stock") of
which the following series and respective number of shares were issued and
outstanding; 217,500 shares of Series B Non-Convertible Preferred Stock of which
30,000 shares have been validly issued and are outstanding, fully paid and
non-assessable as of the date hereof and (ii) 5,000,000 shares of common stock,
par value $1.667 per share ("IBI Common Stock") 2,838,748 shares of which have
been validly issued and are outstanding, fully paid and non-assessable as of the
date hereof and no shares are held in treasury. IBI owns all of the shares of
the issued and outstanding capital stock of Independence Bank, free and clear of
any lien or other encumbrance. As of the date hereof, no shares of IBI Preferred
Stock or IBI Common Stock were reserved for issuance, except that (i) 138,549
shares of IBI Common Stock were reserved for issuance upon the exercise of stock
options heretofore granted pursuant to IBI's stock option plans; (ii) 187,500
shares of IBI's Series B Non-Convertible Preferred Stock were reserved for
issuance upon exercise of a warrant held by CBI; and (iii) 100,000 shares of IBI
Common Stock were reserved for issuance pursuant to IBI's dividend reinvestment
and shareholder purchase plans (the "IBI DRIP"). There are no outstanding
subscriptions, Rights, options, warrants, calls, commitments or agreements to
which IBI or any of its subsidiaries is a party or by which any of them may be
bound, which relate to the issuance or sale by any of them of shares of their
capital stock except as set forth above. The number of issued and outstanding
shares of IBI's Common Stock and Preferred Stock will be the same on the
Effective Date as on the date hereof except for additional shares of IBI Common
Stock issued pursuant to the exercise of stock options under IBI's stock option
plans. None of the shares of IBI's capital stock has been issued in violation of
the preemptive rights of any person. IBI does not own, directly or indirectly,
5% or more of the outstanding capital stock or other voting securities of any
corporation, bank or other organization except as set forth in the IBI Form
10-K.
3.3 There have been delivered to CBI (a) the audited consolidated
balance sheets of IBI and its subsidiaries as of December 31, 1995 and 1994 and
the related consolidated statements of income, changes in shareholders' equity
and cash flows for the
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years ended December 31, 1995 and 1994 together with the notes related thereto
and (b) the unaudited consolidated balance sheet of IBI and its subsidiaries as
of June 30, 1996, and the related consolidated statement of income for the six
month period ended June 30, 1996. Such financial statements (i) are in
accordance with the books and records of IBI and its subsidiaries, (ii) are true
and correct in all material respects and present fairly IBI's and its
subsidiaries' consolidated financial condition as of December 31, 1995 and 1994
and the results of their operations for the years then ended and as of June 30,
1996 and the result of their operations for the six month period ended June 30,
1996, and (iii) have been prepared in accordance with generally accepted
accounting principles consistently applied. The audited financial statements
(with related notes) referred to in the first sentence of this subsection have
been examined and reported upon by Arthur Andersen LLP, independent certified
public accountants. Arthur Andersen LLP is "independent" with respect to IBI
under the criteria established and applied by the Securities and Exchange
Commission.
3.4 (a) IBI and its subsidiaries have filed all federal, state,
city, county and local tax returns which are required to be filed by them except
for such returns with regard to which the penalty for non-filing will not have a
material adverse effect upon the financial condition or results of operation of
IBI, and such returns are true and correct in all material respects; (b) IBI and
its subsidiaries have paid all taxes required to be paid prior to the date of
this Agreement or have established adequate reserves therefor; (c) there are no
deficiencies of tax, interest or penalties which have been assessed against IBI
or any of its subsidiaries; (d) no extensions of time with respect to any date
on which any tax return was or is to be filed by IBI or any of its subsidiaries
is in force and no waiver or agreement by IBI or any of its subsidiaries is in
force for the extension of time for the assessment or payment of any tax; and
(e) the statute of limitations with respect to any tax year still open has not
been waived. Neither the transactions contemplated hereby nor the termination of
the employment of any employees of IBI or any IBI subsidiary prior to or
following consummation of the transactions contemplated hereby could result in
IBI or any IBI subsidiary making or being required to make any "excess parachute
payment" as that term is defined in Section 280G of the Code.
3.5 IBI and its subsidiaries have good and marketable title to all
their respective assets free and clear of all liens or other encumbrances other
than (a) the liens or other encumbrances described in Schedule 3.5 to this
Agreement, or (b) such liens or other encumbrances, as the case may be, shown in
the financial statements or the notes thereto, or (c) encumbrances and
restrictions imposed by law, ordinances or regulations incidental to the usual
and normal conduct of business or other imperfections of title, or restrictions
or encumbrances, all of which, in the aggregate, do not materially adversely
interfere with the present use of such property in IBI's and any of its
subsidiaries' business and with respect to any real estate which do not result
in the inability to procure title insurance thereon at regular rates. With the
foregoing exceptions, no person owns any interest in any of the assets of IBI or
any of its subsidiaries except as incidental to banking transactions entered
into in the ordinary course of business.
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3.6 Since June 30, 1996, there has been no change in the
consolidated condition, financial or otherwise, of IBI and its subsidiaries,
other than changes occurring in the ordinary course of business, which changes
have not materially adversely changed or affected their business or condition,
financial or otherwise. Except as set forth in the IBI Prospectus dated July 18,
1996, from June 30, 1996 to the date of this Agreement, neither IBI nor any of
its subsidiaries has (i) incurred any indebtedness, liabilities (whether
current, long term, fixed, contingent, liquidated, unliquidated, or otherwise)
or obligations other than in the ordinary course of business; (ii) excluding
transfers among IBI and its subsidiaries, declared or paid any dividends or made
any distribution of any of its assets in kind or redeemed or repurchased any
shares of its capital stock; (iii) sold or transferred any of its assets, except
in the ordinary course of business; or (iv) acquired the assets or capital stock
of any other entity other than in the ordinary course of business.
3.7 Since June 30, 1996, there has been no damage, destruction or
loss, whether covered by insurance or not materially adversely affecting the
assets or business of IBI or any of its subsidiaries, or any other event or
condition of any character materially adversely affecting the assets or business
of IBI or any of its subsidiaries (other than external market conditions
affecting banks generally).
3.8 IBI has delivered to CBI a list of all insurance policies and
binders maintained by IBI or any of its subsidiaries. Such policies and binders
are in full force and effect and will continue to be in full force and effect to
the Effective Date.
3.9 Except as set forth in Schedule 3.9 to this Agreement or in
IBI's 1996 Proxy Statement, neither IBI nor any of its subsidiaries is a party
to, nor have any obligation under, any written or oral (a) contracts and other
agreements with any current or former director, officer, employee, shareholder,
consultant or agent (except those terminable on ninety days' or less notice
without premium or penalty or which do not involve more than $10,000 per year),
(b) contracts and other agreements with any labor union (whether in effect or
expired), (c) bonus, severance, hospitalization, vacation, deferred
compensation, pension or profit sharing, retirement, payroll savings, stock
option, group life or medical insurance, death benefit, welfare, or other
employee benefit plan as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended, ("ERISA") (hereinafter collectively the
"Employee Benefit Plans"), (d) material leases for real or personal property
(other than leases for branches disclosed in the IBI Form 10-K), or (e) other
material contracts and agreements of any other nature with any person other than
contracts and other agreements made in the ordinary course of business
consistent with past practices. A true and correct copy of each of such
contracts and other agreements and branch leases has been made available to CBI
or, if oral, have been described in Schedule 3.9. All of the material contracts
and agreements (whether or not set forth in Schedule 3.9) to which IBI or any of
its subsidiaries is a party are in full force and effect; IBI or any of its
subsidiaries is not in material default under any of them nor to the best of
IBI's knowledge is any other party to any such contract or other agreement in
material default thereunder. Neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will result
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in any breach or acceleration of, or constitute (or with notice or lapse of time
or both would constitute) a default under any such contract or other agreement
or any branch lease. To the best of IBI's knowledge, no employee of IBI or any
of its subsidiaries is represented by a labor union with respect to his or her
employment by IBI or any of its subsidiaries and no attempt has been or is
currently being made by any person to have the employees of IBI or any of its
subsidiaries represented by a labor union.
3.10 The Employee Benefit Plans of IBI and its subsidiaries comply
in all material respects with all applicable laws including, without limitation,
ERISA and the Internal Revenue Code of 1986, as amended ("Code"). In respect of
the Employee Benefit Plans identified on Schedule 3.9 or in IBI's 1996 Proxy
Statement, IBI and its subsidiaries each have made all contributions required to
be made by them and have or will have accrued as of the Effective Date all
payments due and payable as of the Effective Date. The employee pension benefit
plans (as defined in Section 3(2) of ERISA) of IBI and its subsidiaries have
received determination letters from the Internal Revenue Service that such plans
are qualified plans pursuant to Section 401(a) of the Code. To the best of IBI's
knowledge, there has been no "reportable event" (as defined in the Code or
ERISA), no event described in Section 4062(e) of ERISA, no violation of Section
404 of ERISA, no "prohibited transaction" (as defined in the Code or ERISA) and,
except as contemplated by this Agreement, no termination or partial termination
of any Employee Benefit Plan maintained or established by IBI or any of its
subsidiaries or to which IBI or any of its subsidiaries contributes. There is no
material issue relating to Independence Bank's employee pension benefit plan, or
its related trust, currently pending before the Internal Revenue Service, the
Department of Labor or the Pension Benefit Guaranty Corporation and neither IBI
nor its subsidiaries have any knowledge of any fact or circumstances which
adversely affects the status of any Employee Benefit Plan listed in Schedule 3.9
or in IBI's 1996 Proxy Statement.
3.11 Schedule 3.11 to this Agreement sets forth a list of all
actions, suits, investigations (formal or informal) or proceedings pending
against IBI or any of its subsidiaries in any court or before any governmental
agency or arbitration tribunal other than those actions, suits, investigations
or proceedings in which the liability of IBI or any of its subsidiaries is
reasonably anticipated to be less than $10,000 per action, suit, investigation
or proceeding provided that the liability of IBI and its subsidiaries under all
such omitted actions, suits, investigations or proceedings is reasonably
anticipated to be less than $100,000. Schedule 3.11 may, at the option of IBI,
list actions, suits, investigations or proceedings in which the liability of IBI
or any of its subsidiaries is reasonably anticipated to be less than $10,000 and
any listing in such Schedule shall not be deemed an admission of liability.
There are no actions, suits, investigations (formal or informal) or proceedings
pending or to the knowledge of IBI or any of its subsidiaries, threatened
against IBI or any of its subsidiaries in any court or before any governmental
agency or arbitration tribunal which (either individually or in the aggregate)
are reasonably anticipated to have a material adverse effect on the consolidated
net worth of IBI. Neither IBI nor any of its subsidiaries is
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subject to or bound by any judgment, order, writ, injunction or decree of any
such court, agency or tribunal, except in the ordinary course of Independence
Bank's business.
3.12 Except as disclosed on Schedule 3.12, there are no pending
actions, suits or proceedings which have been brought by, or on behalf of IBI or
any of its subsidiaries in any court or before any governmental agency or
arbitration tribunal, except such actions, suits and proceedings in the ordinary
course of Independence Bank's business.
3.13 On and after the date hereof, to and including the Effective
Date, neither IBI nor any of its subsidiaries will, without the prior written
consent of CBI, do any of the following:
(a) except as specifically permitted herein, make any changes
in (and to the terms of) its authorized, issued or outstanding capital
stock or any security convertible into capital stock;
(b) declare or pay any dividends (in cash, stock or in kind)
on shares of its capital stock except (i) dividends paid by Independence
Bank or any other subsidiary of IBI to IBI, and (ii) quarterly cash
dividends by IBI to its shareholders (including a pro rata cash dividend
for the calendar quarter in which the Effective Date occurs) not to exceed
$.35 per share on an annualized basis;
(c) effect any recapitalization, reclassification, stock
dividend, stock split or like change in its capital or grant any Rights
(including any additional options under any existing IBI stock option
plan);
(d) make any other distribution of its assets or properties to
its shareholders except as permitted in clause (b) above;
(e) acquire any shares of IBI's or any of its subsidiaries'
capital stock;
(f) enter into or commit to enter into any new employment
contract or amend any existing employment contract or grant any salary
increase, bonus, or other form of compensation payable to any officer,
employee or agent, except for salary increases and bonuses consistent with
the past practice of IBI and its subsidiaries, provided, however, that
nothing contained herein shall be deemed to restrict IBI's ability to
hire, as an employee at will, any person who would not be deemed an
executive officer of IBI;
(g) amend the Articles of Incorporation or the By-Laws of IBI
or any of its subsidiaries except where required by applicable law;
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(h) except in the ordinary course of business, incur any
indebtedness, liabilities (whether current, long term, fixed, contingent,
liquidated, unliquidated or otherwise) or obligations;
(i) except in the ordinary course of business, purchase or
otherwise acquire, or sell or otherwise dispose of, any equity security,
debt security or asset;
(j) change the criteria with respect to risk, or overall
quality, of Independence Bank's investment portfolio or loan portfolio;
(k) make capital expenditures other than in the ordinary
course of Independence Bank's business;
(l) create any new Employee Benefit Plan or make any
contributions to any Employee Benefit Plan or other plan relating to its
officers, employees and agents except as may be required by the terms of
any existing Employee Benefit Plan or by applicable law; or
(m) file any application with any state or federal agency
having jurisdiction over the affairs of IBI and its subsidiaries or
conduct its business in any manner other than in accordance with generally
accepted methods and procedures for conducting a banking business;
and neither IBI nor any of its subsidiaries has done any of the things described
in clauses (a) through (m) of this Section 3.13 since June 30, 1996 except as
set forth in Schedule 3.13.
3.14 IBI and each of its subsidiaries will (and have done so since
June 30, 1996) continue to conduct their businesses in the usual, regular and
ordinary manner consistent with past practices. CBI hereby consents to the
incurring and payment, prior to the Effective Date, of all reasonable expenses
of IBI and its subsidiaries in connection with the transactions contemplated by
this Agreement and the Merger Agreement, including the printing of IBI's proxy
material and reasonable legal, investment advisory and accounting fees.
3.15 IBI and its subsidiaries each have the corporate power and
authority to own, lease and operate their properties and to conduct their
businesses as now conducted. IBI and its subsidiaries each have complied and are
in compliance in all material respects with all federal, state and local laws,
regulations, ordinances, rules or orders affecting or regulating the conduct and
operations of their respective businesses except for such non-compliance as
would not have a material adverse effect upon the financial condition or results
of operations of IBI, and neither IBI nor any IBI subsidiary has received
notification from any agency or department of federal, state or local government
(i) asserting a material violation of any such statute or regulation, (ii)
threatening to revoke any license, franchise, permit or government authorization
or (iii) restricting or in any way limiting its operation.
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Neither IBI nor any IBI subsidiary is subject to any regulatory or supervisory
cease and desist order, agreement, directive, memorandum of understanding or
commitment and none of them has received any communication requesting that they
enter into any of the foregoing. IBI and its subsidiaries have all federal,
state, local and foreign governmental authorizations necessary for it to own or
lease its properties and assets and to carry on its business as it is now being
conducted. Schedule 3.15 to this Agreement sets forth a list, brief description
of the purpose of and the current status of, any notice, application or similar
filing made by IBI or any of its subsidiaries within the last two years with any
state or federal agency having jurisdiction over the affairs of IBI and its
subsidiaries.
3.16 IBI has the legal power and authority to enter into this
Agreement, the Merger Agreement and the Option Agreement and to consummate the
transactions contemplated hereby and thereby, subject to the approval thereof by
the shareholders of IBI under applicable law and subject to the approval of the
Department of Banking of the State of New Jersey and the Federal Reserve Board.
This Agreement, the Merger Agreement and the Option Agreement constitute legal,
valid and binding obligations of IBI enforceable against it in accordance with
their respective terms. Except as may otherwise be required in order to comply
with their fiduciary duties, the Board of Directors of IBI will recommend to its
shareholders that they approve the Merger and all other acts and transactions
contemplated by the Merger and all other acts and transactions contemplated by
this Agreement and the Merger Agreement, and after the receipt of such
shareholder approval in the manner required by law, such shareholder approval
shall not be revokable. Approval of this Agreement and the Merger Agreement by
the IBI shareholders shall also be deemed to authorize the IBI Board of
Directors to amend, supplement or waive any of the provisions of this Agreement
and the Merger Agreement as provided in Section 6.16.
3.17 The Board of Directors of IBI has authorized the execution and
delivery of this Agreement, the Merger Agreement and the Option Agreement and
the transactions contemplated hereby and thereby and neither the execution and
delivery of this Agreement, the Merger Agreement or the Option Agreement, nor,
subject to the approval of IBI's shareholders and subject to the approval of the
Department of Banking of the State of New Jersey and the Federal Reserve Board,
the consummation of the transactions contemplated hereby or the fulfillment of,
or the compliance with, the terms, conditions, and provisions of this Agreement
and the Merger Agreement will conflict with, or result in a breach of, any of
the terms, conditions or provisions of the Articles of Incorporation or the
By-Laws of IBI or any of its subsidiaries or of any contract or other agreement
to which IBI or any of its subsidiaries is a party or by which any of them may
be bound, or constitute (with or without the giving of notice or the passage of
time, or both) a default under any such contract or other agreement or cause the
acceleration of the maturity of any obligation of IBI or of any of its
subsidiaries other than with regard to such contracts or other agreements a
default under which would not have a material adverse effect upon the financial
condition or results of operations of IBI. Other than as set forth herein, no
consent, approval or authorization of, or declaration, notice, filing or
registration with, any governmental or regulatory authority, or any other
person, is required to be made or obtained by IBI on or prior to the
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Effective Date in connection with the execution, delivery and performance of
this Agreement, the Merger Agreement or the Option Agreement or the consummation
of the transactions contemplated hereby or thereby.
3.18 All documents and other papers delivered by or on behalf of IBI
in connection with this Agreement, the Merger Agreement and the transactions
contemplated hereby are true and complete in all material respects. The
information furnished by or on behalf of IBI to CBI in connection with this
Agreement, the Merger Agreement and the transactions contemplated hereby do not
contain any untrue statement of a material fact and do not omit to state any
material fact necessary to make the statements made, in the context in which
made, not false or misleading. Except for facts affecting the banking industry
in general, there is no fact which IBI has not disclosed to CBI in writing which
materially adversely affects the business or condition (financial or other) of
IBI or any of its subsidiaries.
3.19 Each loan reflected as an asset on the books and records of IBI
(i) is evidenced by notes, agreements or other evidences of indebtedness which
are true, genuine and what they purport to be, (ii) to the extent secured, has
been secured by valid liens and security interests which have been perfected,
and (iii) is the legal, valid and binding obligation of the obligor named
therein, enforceable in accordance with its terms except as such enforcement may
be affected by bankruptcy or other statutes or regulatory provisions effecting
creditors rights generally.
3.20 Neither IBI nor any IBI subsidiary has received any written
notice of any legal, administrative, arbitral or other proceeding, claim or
action and, to the knowledge of IBI and the IBI subsidiaries, there is no
governmental investigation of any nature ongoing, in each case that could
reasonably be expected to result in the imposition, on IBI or any IBI
subsidiary, of any liability arising under any local, state or federal
environmental statute, regulation or ordinance including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, and there are no facts or circumstances which could reasonably
be expected to form the basis for any such proceeding, claim, action or
governmental investigation that would impose any such liability; and neither IBI
nor any IBI subsidiary is subject to any agreement, order, judgment, decree or
memorandum by or with any court, governmental authority, regulatory agency or
third party imposing any such liability.
3.21 To the best of IBI's knowledge, Schedule 3.19 to this Agreement
is a true and correct list of the Affiliates of IBI as the term "Affiliates" is
used in Rule 145 promulgated under the Securities Act of 1933, as amended.
3.22 To the extent not otherwise delivered to CBI on or prior to the
date hereof, IBI shall cause all Schedules referred to in this Section 3 to be
delivered to CBI within ten business days of the date hereof.
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3.23 As of the date of this Agreement, IBI knows of no reason
relating to it or any of its subsidiaries which would reasonably cause it to
believe that the Merger will not qualify as a pooling of interests for financial
accounting purposes.
4. REPRESENTATIONS AND WARRANTIES OF CBI
CBI represents and warrants to IBI and agrees as follows:
4.1 CBI is a corporation duly organized under the BCA and is validly
existing and in good standing under the laws of the State of New Jersey. CBI is
registered as a bank holding company under the Holding Company Act. Commerce
Bank, N.A., Commerce Bank/Pennsylvania, N.A. and Commerce Bank/Shore, N.A. are
each banking organizations duly organized under the laws of the United States
and are each validly existing and in good standing under the laws of the United
States. Except as set forth in the CBI Annual Report on Form 10-K for the fiscal
year ended December 31, 1995 ("CBI Form 10-K"), CBI has no active subsidiaries
except the Commerce Bank, N.A., Commerce Bank/Pennsylvania, N.A. and Commerce
Bank/Shore, N.A., and neither the Commerce Bank, N.A., Commerce
Bank/Pennsylvania, N.A. and Commerce Bank/Shore, N.A. nor any other subsidiary
of CBI has any active subsidiaries.
4.2 The authorized capital stock of CBI consists of (i) 5,000,000
shares of preferred stock, no par value per share (the "CBI Preferred Stock") of
which the following series and respective number of shares were issued and
outstanding: 417,000 shares of Series C ESOP Cumulative Convertible Preferred
Stock all of which shares have been validly issued and are outstanding, fully
paid and non-assessable as of the date hereof and (ii) 20,000,000 shares of
common stock, par value $1.5625 per share ("CBI Common Stock") 11,425,834 shares
of which have been validly issued and are outstanding, fully paid and
non-assessable as of the date hereof and 100,159 shares are held in treasury.
CBI owns all of the shares of the issued and outstanding capital stock of the
Commerce Bank, N.A., Commerce Bank/Pennsylvania, N.A. and Commerce Bank/Shore,
N.A. free and clear of any lien or other encumbrance. As of the date hereof,
there are no outstanding subscriptions, rights, options, warrants, calls,
commitments or agreements to which either CBI or any of its subsidiaries is a
party or by which any of them may be bound, which relate to the issuance or sale
by any of them of shares of their capital stock except as set forth below. As of
the date hereof, no shares of CBI Preferred Stock or CBI Common Stock were
reserved for issuance, except (i) those shares which relate to the issuance of
CBI Common Stock in connection with the acquisition of insurance agencies, (ii)
those contemplated by the Merger Agreement, (iii) 309,016 shares of CBI Common
Stock were reserved for issuance pursuant to CBI's dividend reinvestment and
stock purchase plans, (iv) 1,897,867 shares of CBI Common Stock were reserved
for issuance pursuant to CBI stock option plans, and (v) 586,761 shares of CBI
Common Stock were reserved for issuance upon conversion of the shares of CBI
Series C ESOP Cumulative Convertible Preferred Stock, and provided however, that
the foregoing shall not be construed as preventing CBI or any of its
subsidiaries from proceeding with other mergers or acquisitions using CBI's
capital stock as
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the consideration whether or not such mergers or acquisitions are completed
prior to the Effective Date. The shares of CBI common stock to be issued and
delivered to the shareholders of IBI pursuant to the Merger Agreement are
presently authorized but unissued and will, upon issuance and delivery pursuant
to the Merger Agreement, be validly issued and outstanding, fully paid and
nonassessable and no shareholder of CBI will have any preemptive rights of
subscription or purchase in respect thereto.
4.3 There has been delivered to IBI (a) the audited consolidated
balance sheet of CBI and its subsidiaries as of December 31, 1995 and December
31, 1994 and the related consolidated statements of income, changes in
shareholders' equity and cash flows for the years ended December 31, 1995 and
December 31, 1994 together with the notes related thereto and (b) the unaudited
consolidated balance sheet of CBI and its subsidiaries as of June 30, 1996 and
the related consolidated statement of income for the six month period ended June
30, 1996. Such financial statements (i) are in accordance with the books and
records of CBI and its subsidiaries, (ii) are true and correct in all material
respects and present fairly CBI's and its subsidiaries' consolidated financial
condition as of December 31, 1995 and 1994 and the results of their operations
for the years then ended and as of June 30, 1996 and the results of their
operations for the six-month period ended June 30, 1996, and (iii) have been
prepared in accordance with generally accepted accounting principles
consistently applied. The audited financial statements (with related notes)
referred to in the first sentence of this subsection have been examined and
reported upon by Ernst & Young LLP, independent certified public accountants.
Ernst & Young LLP is "independent" with respect to CBI under the criteria
established and applied by the Securities and Exchange Commission.
4.4 From June 30, 1996 to the date of this Agreement, there has been
no change in the consolidated condition, financial or otherwise, of CBI and its
subsidiaries, other than changes occurring in the ordinary course of business,
which changes have not materially adversely changed or affected their business
or condition, financial or otherwise. From June 30, 1996 to the date of this
Agreement, neither CBI nor any of its subsidiaries has (i) incurred any
indebtedness, liabilities (whether current, long term, fixed, contingent,
liquidated, unliquidated, or otherwise) or obligations other than in the
ordinary course of business; (ii) excluding transfers among CBI and its
subsidiaries, declared or paid any dividends (other than its regular quarterly
cash dividends and annual stock dividend) or made any distribution of any of its
assets in kind or redeemed or repurchased any shares of its capital stock; (iii)
sold or transferred any of its assets, except in the ordinary course of
business; or (iv) acquired the assets or capital stock of any other entity other
than in the ordinary course of business.
4.5 From June 30, 1996 to the date of this Agreement, there has been
no damage, destruction or loss, whether covered by insurance or not, materially
adversely affecting the assets or business of CBI or any of its subsidiaries, or
any other event or condition of any character materially adversely affecting the
assets or business of CBI or any of its subsidiaries (other than external market
conditions affecting banks generally).
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4.6 CBI has the legal power and authority to enter into this
Agreement and the Merger Agreement, and to consummate the transactions
contemplated hereby and thereby subject to the approval of the Department of
Banking of the State of New Jersey and the Federal Reserve Board. This Agreement
and the Merger Agreement constitute the legal, valid and binding obligation of
CBI enforceable against CBI in accordance with their respective terms.
4.7 The execution and delivery of this Agreement, the Merger
Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by the Board of Directors of CBI; and subject
to the approval of the Department of Banking of the State of New Jersey and the
Federal Reserve Board, neither the execution and delivery of this Agreement or
the Merger Agreement nor the consummation of the transactions contemplated
hereby and thereby will conflict with or result in the breach of, the terms,
conditions or provisions of the Articles of Incorporation or the By-Laws of CBI
or any of its subsidiaries, or of any contract or other agreement to which CBI
or any of its subsidiaries is a party or by which any of them may be bound or
constitute (with or without the giving of notice or passage of time, or both) a
default under any such instrument or cause the acceleration of the maturity of
any obligation of CBI or any of its subsidiaries.
4.8 All documents and other papers delivered by or on behalf of CBI
in connection with this Agreement, the Merger Agreement and the transactions
contemplated hereby are true and complete in all material respects. The
information furnished by or on behalf of CBI to IBI in connection with this
Agreement, the Merger Agreement and the transactions contemplated hereby do not
contain any untrue statement of a material fact and do not omit to state any
material fact necessary to make the statements made, in the context in which
made, not false or misleading. Except for facts affecting the banking industry
in general, there is no fact which CBI has not disclosed to IBI in writing which
materially adversely affects the business or condition (financial or other) of
CBI or any of its subsidiaries.
4.9 As of the date of this Agreement, CBI knows of no reason
relating to it or any of its subsidiaries which would reasonably cause it to
believe that the Merger will not qualify as a pooling of interests for financial
accounting purposes.
4.10 There are no actions, suits, investigations (formal or
informal) or proceedings pending or to the knowledge of CBI or any of its
subsidiaries, threatened against CBI or any of its subsidiaries in any court or
before any governmental agency or arbitration tribunal which (either
individually or in the aggregate) are reasonably anticipated to have a material
adverse effect on the consolidation net worth of CBI. Neither CBI nor any of its
subsidiaries is subject to or bound by any judgment, order, writ, injunction or
decree of any such court, agency or tribunal, except in the ordinary course of
CBI's and its subsidiaries business.
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4.11 There are no pending actions, suits or proceedings which have
been brought by, or on behalf of CBI or any of its subsidiaries in any court or
before any governmental agency or arbitration tribunal, except such actions,
suits and proceeding in the ordinary course of CBI's and its subsidiaries
business.
4.12 CBI and its subsidiaries each have the corporate power and
authority to own, lease, operate their properties and to conduct their
businesses as now conducted. CBI and its subsidiaries each have complied and are
in compliance in all material respects with all federal, state and local laws,
regulations, ordinances, rules or orders affecting or regulating the conduct and
operations of their respective businesses except for such non-compliance as
would not have a material adverse effect upon the financial condition or results
of operations of CBI, and neither CBI nor any CBI subsidiary has received
notification from any agency or department of federal, state or local government
(i) asserting a material violation of any such statute or regulation, (ii)
restricting or in any way limiting its operation. Neither CBI nor any CBI
subsidiary is subject to any regulatory or supervisory cease and desist order,
agreement, directive, memorandum of understanding or commitment and none of them
has received any communication requesting that they enter into any of the
foregoing. CBI and its subsidiaries have all federal, state, local and foreign
governmental authorizations necessary for it to own or lease its properties and
assets and to carry on its business as it is now being conducted.
4.13 Neither CBI nor any CBI subsidiary has received any written
notice of any legal, administration, arbitral or other proceeding, claim or
action and, to the knowledge of CBI and the CBI subsidiaries, there is no
governmental investigation of any nature ongoing, in each case that could
reasonably be expected to result in the imposition, on CBI or any CBI
subsidiary, of any material liability arising under any local, state or federal
environmental statute, regulation or ordinance including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, and there are no facts or circumstances which could reasonably
be expected to form the basis for any such proceeding, claim, action or
governmental investigation that would impose any such material liability; and
neither CBI nor any CBI subsidiary is subject to any agreement, order, judgment,
decree or memorandum by or with any court, governmental authority, regulatory
agency or third party imposing any such material liability.
5. APPROVAL OF IBI'S SHAREHOLDERS AND SECURITIES ACT OF 1933
5.1 As promptly as practicable after the "Registration Statement"
referred to below becomes effective with the Securities and Exchange Commission
("SEC" or "Commission"), IBI will duly hold a meeting of its shareholders for
the purpose of authorizing the transactions contemplated by this Agreement and
the Merger Agreement insofar as they relate to IBI. IBI will, in accordance and
full compliance with the Securities Exchange Act of 1934, as amended ("1934
Act") and the rules and regulations promulgated thereunder, and to the extent
permitted consistent with the Board's exercise of its fiduciary duty, solicit
proxies from its shareholders, for use at the meeting of IBI shareholders
referred
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to above, in favor of the transactions contemplated by this Agreement and the
Merger Agreement. Except with the prior written consent of CBI, IBI will not
distribute any materials to its shareholders in connection with such
solicitation of proxies other than materials contained in the Registration
Statement (as defined in Section 5.2 hereof) after such Registration Statement
shall have become effective. To the extent necessary, CBI shall similarly hold a
meeting of its shareholders for the purpose of authorizing the transactions
contemplated by this Agreement and the Merger Agreement.
5.2 CBI and IBI acknowledge that the transactions contemplated
hereby are subject to the provisions of the Securities Act of 1933, as amended
(the "1933 Act"), and Rule 145 promulgated thereunder. CBI agrees to prepare
promptly (with the assistance and cooperation of IBI) and file a "Registration
Statement" pursuant to the provisions of the 1933 Act for the purposes of
registering the shares of CBI common stock to be issued in connection with the
transactions contemplated hereby. IBI agrees to provide promptly to CBI
information concerning the business and financial condition and affairs of IBI
and its subsidiaries as may be required or appropriate for inclusion in the
Registration Statement and to cause its counsel and auditors to cooperate with
CBI's counsel and auditors in the preparation and filing of such Registration
Statement. CBI and IBI agree to use their respective best efforts to have such
Registration Statement declared effective under the 1933 Act as soon as may be
practicable and to distribute the prospectus contained in such Registration
Statement ("Prospectus") to the shareholders of IBI in accordance with
applicable law. Except to the extent permitted by Rule 145(b) or with the prior
consent of the other, CBI and IBI agree not to publish any communication, other
than the Registration Statement or notice and proxy material accompanied by the
Prospectus, in respect of this Agreement, the Merger Agreement, or the
transactions contemplated hereby. CBI shall not be required to maintain the
effectiveness of the Registration Statement or the Prospectus for the purpose of
resale by the affiliates of IBI, as such term is used in Rule 145. CBI shall
take all actions necessary to register or qualify the shares of CBI Common Stock
to be issued in the Merger pursuant to all applicable state "blue sky" or
securities laws and shall maintain such registrations or qualifications in
effect for all purposes hereof. CBI shall apply for approval to list the shares
of CBI Common Stock to be issued in the Merger on the NYSE, subject to official
notice of issuance, prior to the Effective Date.
5.3 Each party warrants, represents and covenants to the other that
when the Registration Statement shall become effective, and at all times
subsequent to effectiveness, up to and including the date of the IBI
shareholders meeting with respect to the transactions contemplated hereby, such
Registration Statement and all amendments or supplements thereto will, with
respect to the information furnished by each party or its representatives to the
other party or its representatives, (i) comply in all material respects with the
provisions of the 1933 Act and the 1934 Act and the rules and regulations
thereunder and (ii) 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 contained therein not misleading. Each party warrants, represents and
covenants to the other that all information furnished to each other for use in
the regulatory filings described in or
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contemplated by this Agreement and the Merger Agreement shall 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 contained therein not
misleading. Each party hereby agrees to fully indemnify and hold harmless the
other party, and its directors, officers and representatives, from and against
any and all losses, claims, liabilities, damages and expenses (including
reasonable attorneys fees and costs of litigation) that arise out of or are
based upon a breach of this warranty, representation and covenant.
6. PRIOR TO CLOSING
6.1 From and after the date hereof, CBI or IBI, as the case may be,
will provide to the officers and accredited representatives of the other, their
(including subsidiaries') books and records at such times as either shall
reasonably request in order that CBI or IBI, as the case may be, may have full
opportunity to make such investigation as either shall desire to make of the
business and affairs of the other and its subsidiaries, provided that such
investigation shall not unduly interfere with the normal conduct by the other
and its subsidiaries of their business. CBI and IBI, as the case may be, shall
each furnish to the other such information about its business and affairs as the
other may reasonably request in order to consummate the transactions herein
contemplated. All non-public materials and information furnished by the parties
hereto shall be held strictly confidential and may not be used by the receiving
party for their own benefit whatsoever if the closing contemplated hereunder
does not occur. In such event, any party receiving such non-public materials and
information shall return such materials and information to the party providing
such materials and information. The obligations of the parties pursuant to the
preceding sentence shall survive any termination of this Agreement for any
reason whatsoever.
6.2 CBI and IBI will use their respective best efforts and cooperate
with each other in promptly obtaining all government, regulatory and shareholder
consents and approvals necessary for the consummation of the transactions
contemplated by this Agreement and the Merger Agreement. CBI and IBI shall
cooperate with each other and shall promptly furnish and make available to each
other any and all information, data and facts which may be required to obtain
all government, regulatory and shareholder consents and approvals and to comply
with all rules in obtaining IBI's shareholders consent to the Merger.
6.3 No party hereto shall take or fail to take, or cause or permit
its subsidiaries to take or fail to take, or to the best of its ability permit
to be taken or omitted to be taken by any third persons, any action that would
substantially impair the prospects of completing the Merger pursuant to this
Agreement and the Merger Agreement, that would materially delay such completion,
or that would adversely affect the qualification of the Merger for pooling of
interests accounting treatment or as a reorganization within the meaning of
Section 368(a) of the Code; provided that nothing herein contained shall
preclude CBI from exercising its rights under the Option Agreement.
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6.4 CBI and IBI shall agree with each other as to the form and
substance of any press release related to the Merger and shall consult each
other as to the form and substance of other public disclosures related thereto,
provided, however, that nothing contained herein shall prohibit any party,
following notification to the other, from making any disclosure which is
required by applicable law or the rules of the NYSE or NASDAQ.
6.5 IBI shall not authorize or permit any of its officers,
directors, employees or agents to directly or indirectly solicit, initiate or
encourage any inquiries relating to, or the making of any proposal which
constitutes, a "takeover proposal" (as defined below), or recommend or endorse
any takeover proposal, or participate in any discussions or negotiations, or
provide third parties with any non-public information, relating to any such
inquiry or proposal or otherwise facilitate any effort or attempt to make or
implement a takeover proposal except to the extent legally required for the
discharge of the fiduciary duties of its Board of Directors; provided, however,
that IBI may communicate information about any such takeover proposal to its
stockholders if, in the judgment of its Board of Directors, based upon the
advice of outside counsel, such communication is required under applicable law.
IBI will take all actions necessary or advisable to inform the appropriate
individuals or entities referred to in the first sentence hereof of the
obligations undertaken herein. IBI will notify CBI immediately if any such
inquiries or takeover proposals are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with, IBI, and IBI will promptly inform CBI in writing of
all of the relevant details with respect to the foregoing. As used in this
Agreement, "takeover proposal" shall mean any tender or exchange offer, proposal
for a merger, consolidation or other business combination involving IBI or any
of its subsidiaries or any proposal or offer to acquire in any manner a
substantial equity interest in, or a substantial portion of the assets of, IBI
or any of its subsidiaries other than the transactions contemplated or permitted
by this Agreement, the Merger Agreement and the Option Agreement.
6.6 (a) CBI and IBI shall cooperate and use their best efforts to
identify those persons who may be deemed to be "affiliates" of CBI or IBI within
the meaning of Rule 145 promulgated by the Commission under the Securities Act
and for purposes of qualifying the "Merger" for "pooling of interests"
accounting treatment. IBI and CBI shall use its respective best efforts to cause
each person so identified to deliver to CBI, no later than 30 days prior to the
Effective Date, a written agreement in form and substance satisfactory to CBI
with respect to the resale of CBI Common Stock. Shares of CBI Common Stock
issued to such IBI and CBI affiliates in exchange for IBI Common Stock or
previously owned by them shall not be transferable until such time as financial
results covering at least 30 days of combined operations of CBI and IBI have
been published within the meaning of Section 201.01 of the Commission's
Codification of Financial Reporting Policies, regardless of whether each such
affiliate has provided the written agreement referred to in this section.
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(b) CBI shall use its best efforts to publish no later than
ninety (90) days after the end of the first month after the Effective Date in
which there are at least thirty (30) days of post-Merger combined operations
(which month may be the month in which the Effective Date occurs), combined
sales and net income figures as contemplated by and in accordance with the terms
of SEC Accounting Series Release No. 135.
6.7 After the date of this Agreement, each of IBI and CBI shall
coordinate with the other the declaration of any dividends in respect of IBI
Common Stock and CBI Common Stock and the record dates and payment dates
relating thereto, it being the intention of the parties hereto that holders of
IBI Common Stock or CBI Common Stock shall not receive two dividends, or fail to
receive one dividend, for any single calendar quarter with respect to their
shares of IBI Common Stock and/or CBI Common Stock and any shares of CBI Common
Stock any such holder receives in exchange therefor in the Merger.
6.8 (a) CBI agrees that all rights to indemnification or exculpation
now existing in favor of the directors, officers, employees and agents of IBI
and its subsidiaries as provided in their respective charters or By-laws or
otherwise in effect as of the date hereof with respect to matters occurring
prior to the Effective Date of the Merger shall survive the Merger and shall
continue in full force and effect. To the maximum extent permitted by the BCA,
such indemnification shall be mandatory rather than permissive and CBI shall
advance expenses in connection with such indemnification.
(b) In additional to the rights provided for in Section (a)
hereof, and not in limitation thereof, CBI shall indemnify, defend and hold
harmless each present and former director, officer, employee and agent of IBI
and its subsidiaries ("Indemnified Parties") to the fullest extent permitted by
law for all claims, losses, damages, liabilities, costs, judgments and amounts
paid in settlement, including advancement of expenses (including attorneys'
fees) as incurred in respect of any threatened, pending or contemplated claim,
action, suit or proceeding, whether criminal, civil, administrative or
investigative, including, without limitation, any action by or on behalf of any
or all securityholders of IBI or by or in the right of IBI or CBI, or
investigation relating to any action or omission by such party in its capacity
as such (including service to any other entity, plan, trust or the like at IBI's
request) occurring on or prior to the Effective Date of the Merger which arise
out of or related to the transactions contemplated by this Agreement.
(c) In the event that CBI or any of its successors or assigns
(i) consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
person, then and in each such case, proper provisions shall be made so that the
successors and assigns of CBI shall assume its obligations as set forth in this
Section 6.8.
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(d) The provisions of this Section 6.8 are intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party, his heirs
and his personal representatives.
6.9 The issuance of shares under and pursuant to the IBI DRIP shall
be immediately suspended.
7. CONDITIONS PRECEDENT TO CBI'S OBLIGATION
The obligation of CBI hereunder to close the transactions
contemplated by this Agreement and the Merger Agreement is subject to the
following conditions precedent (all or any of which may be waived by CBI in its
sole discretion):
7.1 Each of the representations and warranties herein made by IBI
shall be true in all material respects on the Effective Date as if made on, as
of, and with respect to the Effective Date, and the agreements to be performed
by IBI and its subsidiaries on or before the Effective Date shall have been so
performed in all material respects. On the Effective Date, IBI will furnish a
certificate to CBI, dated as of the Effective date, of its Chairman and
Secretary to the effect set forth in this Section 7.1.
7.2 On or before the Effective Date, CBI and IBI shall have received
all required permits, consents and approvals (which permits, consents and
approvals shall be unconditional and free of any restrictions or requirements by
reason of the acceptance of any such permit, consent or approval) from all
federal and state governmental agencies and boards (including, without
limitation, the Department of Banking of the State of New Jersey and the Federal
Reserve Board) and any application waiting period shall have expired.
7.3 A ruling shall have been obtained from the Internal Revenue
Service or an opinion of counsel satisfactory to CBI shall have been received,
to the effect that the transactions contemplated by this Agreement and the
Merger Agreement will constitute a tax free reorganization so that no gain or
loss will be recognized to CBI or IBI by reason of the Merger or to the
shareholders of IBI who exchange their IBI common stock for CBI common stock
(other than with respect to cash received in lieu of fractional shares). CBI
agrees that it will not unreasonably withhold its approval with respect to the
form and/or content of any such ruling or opinion of counsel.
7.4 On or before the Effective Date, IBI shall have delivered to CBI
certified copies of the minutes of the meetings of the Board of Directors and
shareholders of IBI approving this Agreement, the Merger Agreement and the
transactions contemplated by this Agreement and the Merger Agreement.
7.5 On or before the Effective Date, there shall have been no
material adverse change in the business, consolidated earnings or consolidated
net worth of IBI and its subsidiaries. It is understood, however, that material
adverse changes caused by external
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market conditions affecting banks generally (e.g. changes in banking legislation
and changes in interest rates) will not relieve CBI or its subsidiaries of their
obligation to close.
7.6 The Registration Statement shall have been declared effective by
the SEC; no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been initiated, or to the knowledge of CBI or IBI, shall be contemplated or
threatened by the SEC.
7.7 On or before the Effective Date, IBI shall have delivered to CBI
all consents and authorizations of landlords or others necessary to permit the
Merger to be consummated without the violation of any lease or other agreement
to which IBI or any of its subsidiaries is a party.
7.8 Each affiliate (as the term is defined in SEC Rule 144) of IBI
shall have delivered to CBI a letter in form and substance satisfactory to
counsel for CBI, stating that he will not resell shares of CBI common stock
acquired pursuant to this Agreement and the Merger Agreement, except as
permitted by SEC Rule 145 which permits regular trading transactions in limited
quantities.
7.9 No action, proceeding or material claim shall be pending to
prevent consummation or seek damages by reason of the transaction contemplated
by this Agreement and the Merger Agreement; no governmental authority shall be
claiming that the transaction shall constitute a violation of law.
7.10 On or before the Effective Date, the shareholders of IBI shall
have duly approved the transactions contemplated by this Agreement and the
Merger Agreement insofar as they related to IBI and, if necessary, similarly the
shareholders of CBI shall have duly approved the transactions contemplated by
this Agreement and the Merger Agreement.
7.11 No event shall have occurred that shall preclude the Merger
from being accounted for as a pooling of interests and, if deemed necessary by
CBI, CBI shall have received a letter from its independent public accountants to
such effect.
7.12 CBI shall have received an opinion of McCarter & English
reasonably satisfactory to it, dated the Closing Date.
7.13 IBI shall have delivered to CBI the Schedules on or before the
date required by Section 3.22 hereof or the Schedules as so delivered to CBI by
IBI in accordance with Section 3.22 hereof do not disclose facts which either
individually or in the aggregate, in the reasonable opinion of CBI, materially
adversely affect or may materially adversely affect the assets, properties,
earnings or business of IBI or any of its subsidiaries.
7.14 On or before the date on which the CBI proxy materials are
mailed to CBI shareholders to vote on the Merger, CBI's financial advisor shall
have issued its written
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fairness opinion that the Exchange Ratio is fair to the shareholders of CBI from
a financial point of view.
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8. CONDITIONS PRECEDENT TO IBI'S OBLIGATION
The obligation of IBI hereunder to close the transactions
contemplated by this Agreement and the Merger Agreement is subject to the
following conditions precedent (all or any of which may be waived by IBI in its
sole discretion):
8.1 Each of the representations and warranties herein made by CBI
shall be true in all material respects on the Effective Date as if made on, as
of, and with respect to the Effective Date, and the agreements to be performed
by CBI on or before the Effective Date shall have been so performed in all
material respects. On the Effective Date, CBI shall furnish a certificate to IBI
dated the Effective Date, of its Chairman of the Board or President and its
Secretary, to the effect set forth in this Section 8.1.
8.2 On or before the Effective Date, IBI and CBI shall have received
all permits, consents and approvals from all federal and state governmental
agencies and boards (including, without limitation, the Department of Banking of
the State of New Jersey and the Federal Reserve Board) and any applicable
waiting period shall have expired.
8.3 A ruling shall have been obtained from the Internal Revenue
Service or an opinion of counsel satisfactory to IBI shall have been received,
to the effect that the transactions contemplated by this Agreement and the
Merger Agreement will constitute a tax free reorganization so that no gain or
loss will be recognized to CBI or IBI by reason of the Merger or to the
shareholders of IBI who exchange their IBI common stock for CBI common stock
(other than with respect to cash received in lieu of fractional shares). IBI
agrees that it will not unreasonably withhold its approval with respect to the
form and/or content of any such ruling or opinion of counsel.
8.4 On or before the Effective Date, CBI shall have delivered to IBI
certified copies of the minutes of the meetings of the Board of Directors of CBI
and, if required, the shareholders of CBI, approving this Agreement, the Merger
Agreement and the transactions contemplated by this Agreement and the Merger
Agreement.
8.5 On or before the Effective Date, there shall be no material
adverse change in the business, consolidated earnings or consolidated net worth
of CBI and its subsidiaries. It is understood, however, that material adverse
changes caused by external market conditions affecting banks generally (e.g.
changes in banking legislation and changes in interest rates) will not relieve
IBI or its subsidiaries of their obligations to close.
8.6 The Registration Statement shall have been declared effective by
the SEC; no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been initiated or, to the knowledge of CBI or IBI, shall be contemplated or
threatened by the SEC.
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8.7 CBI shall have sufficient authorized but unissued shares of CBI
common stock and cash to meet all of CBI's obligations under this Agreement and
the Merger Agreement.
8.8 No action, proceeding or material claim shall be pending to
prevent consummation or seek damages by reason of the transaction contemplated
by this Agreement and the Merger Agreement; no governmental authority shall be
claiming that the transaction shall constitute a violation of law.
Notwithstanding the foregoing, if CBI provides full indemnification to IBI and
its directors and officers (in form and substance and amount reasonably
satisfactory to such directors and officers and specifically providing for the
advancement of expenses) with respect to an such action, proceeding or material
claim brought by a non-governmental party, such action, proceeding or material
claim shall not be deemed a condition precedent to IBI's obligation to close.
8.9 On or before the Effective Date, the shareholders of IBI shall
have duly approved the transactions contemplated by this Agreement and the
Merger Agreement.
8.10 The shares of CBI Common Stock that will be issued in the
Merger shall have been approved for listing on the NYSE, subject to official
notice of issuance.
8.11 No event shall have occurred that shall preclude the Merger
from being accounted for as a pooling of interests.
8.12 IBI shall have received an opinion of Blank Rome Comisky &
McCauley, reasonably acceptable to it, dated the Closing Date.
8.13 On or before the date on which the IBI proxy materials are
mailed to IBI shareholders to vote on the Merger, IBI's financial advisor shall
have issued its written fairness opinion that the Exchange Ratio is fair to the
shareholders of IBI from a financial point of view.
9. CLOSING AND POST-CLOSING
9.1 Closing shall take place at the office of CBI, 1701 Route 70
East, Cherry Hill, New Jersey, commencing at 10:00 A.M. on the tenth business
day immediately following the later of (i) the approval of the Merger by IBI
shareholders or (ii) approval of the Merger by all regulatory authorities and
the expiration of all applicable waiting periods, or such other date as is
mutually agreed to by CBI and IBI provided that all conditions precedent to the
obligations of IBI and CBI to close have then been met or waived. Immediately
upon completion of the closing, CBI shall by telephone instruct its
representative in Trenton, New Jersey to file, or shall otherwise cause the
filing of, an executed Certificate of Merger with the New Jersey Secretary of
State in accordance with Chapter 10 of the BCA.
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<PAGE>
9.2 At the close of business on the last business day preceding the
closing, the stock transfer books of IBI shall be closed.
10. EXPENSES
If the transactions contemplated by this Agreement and the Merger
Agreement are consummated, CBI and IBI each shall pay all expenses incurred by
it in connection with this Agreement, the Merger Agreement and such
consummation. If the transactions contemplated by this Agreement and the Merger
Agreement are not consummated each party shall pay its own expenses except that
the cost of printing the Registration Statement and related Prospectus
heretofore referred to shall be incurred equally by CBI and IBI and if this
Agreement is terminated because of the wilful or intentional breach of any term
or provision hereof, the non-breaching party shall be entitled to be reimbursed
from the breaching party for all of its out-of-pocket expenses incurred in
connection with this Agreement to the date of termination, including without
limitation, legal, accounting and financial advisor costs and expenses. If the
transactions contemplated hereby are not consummated for any reason whatsoever,
nothing contained in this Section shall be deemed to preclude either party from
seeking to recover damages which it incurs as a result of such non-consummation
or to obtain other legal or equitable relief (including specific performance),
if such non-consummation results from a wilful or intentional (but not a
negligent or unintentional) breach of any term or provision of this Agreement or
the Merger Agreement by the party from whom damages are or against whom such
other legal or equitable relief is sought.
11. BROKERS, FINDERS AND FINANCIAL ADVISORS
Each party to this Agreement represents and warrants that such party
has not dealt with any broker, finder or other person, firm or corporation
performing brokerage, finder or similar services, and does not know of any
person, firm or corporation asserting a brokerage, finder's or similar claim, in
connection with the making or negotiation of this Agreement, the Merger
Agreement or the transactions contemplated thereby. CBI acknowledges that it has
received a copy of that certain retainer agreement between IBI and McConnell,
Budd & Downs, Inc. ("MBD") pursuant to which MBD will act as financial advisor
to IBI in connection with the Merger.
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<PAGE>
12. TERMINATION
(a) This Agreement may be terminated and the Merger abandoned
(either before or after approval by the shareholders of IBI contemplated hereby
and without seeking further shareholder approval) at any time prior to the
Effective Date:
(i) by mutual written consent of the parties authorized by
their respective Boards of Directors;
(ii) by written notice from IBI to CBI or CBI to IBI, as the case
may be, if the Effective Date shall not have occurred by June 30,
1997;
(iii) by written notice from IBI to CBI, or CBI to IBI, as the
case may be, stating that the party giving such notice elects to
terminate this Agreement and abandon the Merger, as of a stated
date, which shall not be less than ten business days after the date
on which such notice is given, because (a) the party receiving such
notice will be unable, by June 30, 1997, to meet or satisfy one or
more specified conditions precedent to the obligation of the party
sending such notice to close under this Agreement and (b) the party
sending such notice does not intend to waive the satisfaction of
such conditions precedent;
(iv) in the event of termination of the Merger Agreement pursuant
to the terms thereof;
(v) By CBI, if the Board of Directors of IBI shall (i) withdraw,
modify or change its recommendation or approval in respect of this
Agreement in a manner adverse to CBI or (ii) approve or recommend
any proposal other than by CBI in respect of a takeover proposal (as
defined in Section 6.5 hereof);
(vi) Assuming IBI shall not have contravened Section 6.5 hereof,
by IBI to allow IBI to enter into a takeover proposal (as defined in
Section 6.5 hereof);
(vii) By IBI if the "fair market value" of a share of CBI common
stock, as that term is defined in Section 6 of the Merger Agreement,
is not $20.00 or above; or
(viii) By CBI if the "fair market value" of a share of CBI common
stock, as that term is defined in Section 6 of the Merger Agreement,
is $33.50 or above.
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<PAGE>
13. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
The respective representations, warranties and covenants of the
parties in this Agreement shall not survive the Effective Date and shall
terminate on the Effective Date, except for the covenants contained in Section
4.2 (last sentence only) and 16.3 hereof. However, such termination shall not be
deemed to deprive any of the parties hereto or their subsidiaries, or any of
their directors, officers or controlling persons, of any defense in law or
equity which otherwise would be available against the claims of any person,
including, but not limited to, any shareholder or former shareholder of the
parties hereto. Prior to the Effective Date, each party shall be deemed to have
relied upon each and every representation and warranty of the other party,
regardless of any investigation heretofore or hereafter made by or on behalf of
such party.
14. BENEFITS OF THIS AGREEMENT AND MERGER AGREEMENT
This Agreement and the Merger Agreement and the rights and
obligations of CBI and IBI hereunder shall not be assigned by any party to any
third party, except with the written consent of the other. This Agreement and
the Merger Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective permitted successors and assigns. Nothing in
this Agreement or the Merger Agreement, expressed or implied, is intended to
confer upon any person, other than the parties hereto and their respective
permitted successors and assigns, any rights or remedies under or by reason of
this Agreement and there are no third party beneficiaries of this Agreement or
the Merger Agreement. IBI agrees that to the extent necessary or appropriate to
facilitate the transaction contemplated hereby, IBI will agree and consent to
any change in the method of accomplishing such transaction requested by CBI so
long as such change does not result in a reduction in the Exchange Ratio (as
defined in the Merger Agreement) or result in a materially adverse tax or other
effect to IBI's shareholders.
15. NOTICES
Any notice, request, instruction, legal process, or other instrument
to be given or served hereunder by any party to another shall be deemed given or
served if in writing and delivered personally or sent by facsimile or overnight
express or registered or certified mail, postage prepaid, to the respective
party or parties at the following addresses:
If to CBI:
Commerce Atrium
1701 Route 70 East
Cherry Hill, NJ 08034
Attn: Vernon W. Hill, II
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<PAGE>
With a copy to:
Blank Rome Comisky & McCauley
1200 Four Penn Center Plaza
Philadelphia, PA 19103
Attn: Lawrence R. Wiseman, Esquire
If to IBI:
1100 Lake Street
Ramsey, NJ 07446
Attn: James R. Napolitano
With copies to:
McCarter & English
Four Gateway Center
100 Mulberry Street
Newark, NJ 07102-4096
Attn: Robert A. Schwartz, Esquire
and to such other address or addresses as either party may designate to the
other by like notice as set forth above.
16. MISCELLANEOUS
16.1 As used in this Agreement, the following terms have the
following meanings unless the context otherwise requires:
(i) "contracts and other agreements" means and includes all
contracts, agreements, indentures, leases, franchises, licenses,
commitments or legally binding arrangements, express or implied,
written or oral;
(ii) "lien or other encumbrance" means and includes any lien,
pledge, mortgage, security interest, claim, lease, charge, option,
right of first refusal, easement or any other encumbrance
whatsoever;
(iii) "person' means a natural person, corporation, partnership,
sole proprietorship, joint venture, association, joint-stock
company, trust, estate, unincorporated organization, government (and
any branch or subdivision thereof), government agency, cooperative
or other entity.
(iv) "subsidiaries" means when used with respect to a party to
this Agreement any corporation 50% or more of whose outstanding
stock is either
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<PAGE>
directly or indirectly (through one or more other subsidiaries)
owned by such party.
(v) "Rights" means any warrants, options, rights, convertible
securities or other arrangements or commitments which obligates an
entity to issue or dispose of its equity securities.
(vi) "business day" means any day on which regular trading of
securities occurs on the "NYSE" and "NASDAQ".
(vii) "Option Agreement" means the Option Agreement between CBI
and IBI of even date herewith in the form attached hereto as Exhibit
"B".
16.2 IBI and CBI will each cause its respective subsidiaries to
abide by its respective obligations under this Agreement.
16.3 Subsequent to the Effective Date, the Board of Directors of CBI
shall reserve the right to withhold the payment of dividends on its common stock
from any former shareholder of IBI who fails to exchange certificates
representing the shares of IBI common stock for certificates representing the
shares of CBI common stock in accordance with the Merger Agreement within a
reasonable period of time after such shareholders have been advised by the Board
of Directors of CBI of its determination that the exchange is in the best
interests of CBI. Such shareholders shall retain the right to be paid any such
withheld dividends, without interest, upon presentation of their IBI
certificates for exchange or, in the event such IBI certificates are lost of
destroyed, an affidavit of lost certificate acceptable to CBI.
16.4 IBI and CBI shall use their best efforts to have all publicity,
press releases and other announcements relating to this Agreement, the Merger
Agreement or the transactions contemplated thereby reviewed in advance by both
CBI and IBI.
16.5 This Agreement and the Merger Agreement contains the entire
agreement between the parties hereto with respect to the transactions
contemplated hereby, supersedes all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties, and there are no warranties, representations, covenants or other
agreements between the parties in connection with the subject matter hereof
except as specifically set forth herein.
16.6 Any party to this Agreement may, at any time prior to the
Effective Date, by action taken by its Board of Directors or officers thereunto
duly authorized, waive any of the terms or conditions of this Agreement binding
on the other party or agree to an amendment or modification to this Agreement by
an agreement in writing executed in the same manner (but not necessarily by the
same persons) as this Agreement. No amendment, modification or waiver of this
Agreement shall be binding unless executed in writing by the
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<PAGE>
party to be bound thereby. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar), nor shall any waiver constitute a continuing waiver
unless otherwise expressly provided. IBI's Board of Directors may authorize the
amendment or supplementation of this Agreement or the Merger Agreement or waiver
of any provision hereof or thereof, either before or after the approval of IBI's
shareholders provided in Section 5 hereof (and without seeking further
shareholder approval), so long as such amendment, supplement or waiver does not
result in the reduction of the Exchange Ratio (as defined in the Merger
Agreement) or result in a materially adverse tax or other effect to IBI's
shareholders.
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<PAGE>
16.7 This Agreement has been executed in the State of New Jersey and
shall be construed in accordance with the laws of the State of New Jersey. This
Agreement may be executed in any number of copies, each of which shall be deemed
an original, and all of which together, shall be deemed one and the same
instrument.
IN WITNESS WHEREOF, pursuant to authority duly given by the respective
Boards of Directors of CBI and IBI, this Agreement has been signed on behalf of
said corporations by their respective Chairmen of the Boards, Presidents or Vice
Presidents, as the case may be, under their respective corporate seals, and
attested by their respective Secretaries or Assistant Secretaries, as the case
may be, all on the day, month and year first written above. The signature of a
Secretary or Assistant Secretary of a corporate entity is intended not only as
an execution hereof, but also is a certification that such corporation's board
of directors has duly authorized the execution and delivery of this Agreement.
COMMERCE BANCORP, INC.
By: /s/ VERNON W. HILL, II
-----------------------------------
Vernon W. Hill, II, Chairman
INDEPENDENCE BANCORP, INC.
By: /s/ JAMES R. NAPOLITANO
-----------------------------------
James R. Napolitano, Chairman
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EXHIBIT "A"
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT made this 15th day of October 1996 by and between
INDEPENDENCE BANCORP, INC. ("IBI"), a New Jersey business corporation registered
as a bank holding company under the Bank Holding Company Act of 1956, as amended
("Holding Company Act"), and COMMERCE BANCORP, INC. ("CBI"), a New Jersey
business corporation registered as a bank holding company under the Holding
Company Act (IBI and CBI sometimes collectively referred to as the "Constituent
Corporations").
BACKGROUND
CBI and IBI have entered into an Agreement and Plan of Reorganization of
even date herewith (the "Plan"), which contemplates the merger of IBI with and
into CBI (the "Merger") in accordance with the terms and conditions of this
Merger Agreement.
NOW THEREFORE, in consideration of the premises and mutual covenants and
agreements herein contained, and subject to the satisfaction of the terms and
conditions set forth herein and in the Plan, intending to be legally bound
hereby, IBI and CBI do hereby agree as follows:
SECTION 1
On the Effective Date of the Merger, as hereinafter defined, IBI shall be
merged with and into CBI under and pursuant to Chapter 10 of the New Jersey
Business Corporation Act, as amended ("BCA").
SECTION 2
CBI shall be the surviving corporation (hereinafter referred to as the
"Surviving Corporation"), and the name of the Surviving Corporation shall be
"Commerce Bancorp, Inc."
SECTION 3
On the Effective Date of the Merger:
(a) For all purposes the separate existence of IBI shall cease. IBI shall
be merged with and into CBI, the Surviving Corporation, and the Surviving
Corporation shall thereupon and thereafter possess all the rights, privileges
and powers, of a public as well as of a private
<PAGE>
nature, and all property (real, personal and mixed), and franchises of each
of the Constituent Corporations.
(b) All debts due on whatever account to any of the Constituent
Corporations including subscriptions to shares and other chooses in action
belonging to any of the Constituent Corporations shall be taken and deemed to be
transferred to and vested in the Surviving Corporation without further act or
deed.
(c) The Surviving Corporation thenceforth shall be responsible for all the
liabilities and obligations of each of the Constituent Corporations, but the
liabilities of the Constituent Corporations, or of their shareholders,
directors, or officers, shall not be affected; nor shall the rights of the
creditors thereof, or of any persons dealing with the Constituent Corporations,
or any liens upon the property of the Constituent Corporations, be impaired by
the Merger; and any claim existing or action or proceeding pending by or against
any of the Constituent Corporations may be prosecuted to judgment as if the
Merger had not taken place, or the Surviving Corporation may be proceeded
against or substituted in its place.
(d) Any taxes, penalties and public accounts of the State of New Jersey
claimed against any of the Constituent Corporations, but not settled, assessed
or determined prior to the Merger shall be settled, assessed or determined
against the Surviving Corporation and, together with interest thereon, shall be
a lien against the franchises and property, both real and personal, of the
Surviving Corporation.
If at any time the Surviving Corporation shall consider or be advised that
any further assignment or assurances in law, or any things are necessary or
desirable to vest in the Surviving Corporation, according to the terms hereof,
the title of any property or rights of IBI, the last acting officers and
directors of IBI, or the corresponding officers and directors of the Surviving
Corporation, as the case may be, then shall and will execute and make all such
property assignments and assurances, and do all things necessary or proper to
vest title in such property or rights in the Surviving Corporation, and
otherwise to carry out the purposes of this Merger Agreement.
SECTION 4
(a) On the Effective Date, the Articles of Incorporation and By-laws of
CBI, as in effect immediately prior to the Effective Date, shall become the
Articles of Incorporation and By-laws of the Surviving Corporation (whose name
shall remain Commerce Bancorp, Inc.), until duly amended in accordance with law.
(b) On the Effective Date, the then Board of Directors of CBI shall serve
as the Board of Directors of the Surviving Corporation until such time as their
successors have been elected and qualified.
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<PAGE>
(c) On the Effective Date, the persons who are executive or other offices
of CBI shall serve as officers of the Surviving Corporation until such time as
the Board of Directors of the Surviving Corporation shall otherwise determine.
SECTION 5
On the Effective Date:
(a) The shares of CBI Common Stock and Preferred Stock then issued or
outstanding (or held in Treasury) shall by virtue of the Merger and without any
action on the part of the holder thereof, be automatically converted into and
become the same number of shares of Common Stock and Preferred Stock of the
Surviving Corporation. From and after the Effective Date, each certificate
which, prior to the Effective Date, represented shares of CBI, shall evidence
ownership of shares of the Surviving Corporation on the basis hereinbefore set
forth. Each share of Common Stock and Preferred Stock of the Surviving
Corporation issued pursuant to this Section shall be fully paid and
non-assessable.
(b) Each share of IBI Common Stock then issued and outstanding immediately
prior to the Effective Date (except as provided in Subsection (d)) shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be automatically converted into and become .935 fully paid and non-assessable
shares of the common stock, par value $1.5625 per share, of CBI ("CBI Common
Stock"), subject to adjustment as set forth in Section 5(f) hereof, (hereinafter
the "Exchange Ratio"). From and after the Effective Date, each certificate
which, prior to the Effective Date, represented shares of IBI Common Stock,
shall evidence ownership of shares of CBI Common Stock on the basis hereinbefore
set forth.
(c) No fractional shares of CBI Common Stock shall be issued as a result of
the Merger. In lieu of the issuance of fractional shares, cash adjustments will
be paid to the shareholders of IBI in respect of any fraction of a share of CBI
Common Stock which would otherwise be issuable under this Merger Agreement. Such
cash adjustment shall be equal to an amount determined by multiplying such
fraction by a number derived by multiplying the Exchange Ratio by the fair
market value of CBI Common Stock (as that term defined in Section 6 hereof).
(d) Each issued, but not outstanding share of IBI Common Stock held as a
treasury share by IBI or owned beneficially by any subsidiary of IBI other than
in a fiduciary capacity or in connection with a debt previously contracted and
all shares of IBI Common Stock owned by CBI or owned beneficially by any
subsidiary of CBI other than in a fiduciary capacity or in connection with a
debt previously contracted at the Effective Date of the Merger, if any, shall
thereupon and without more be cancelled and retired and cease to exist and no
cash, stock or other property shall be delivered in exchange therefor.
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<PAGE>
(e) Each share of IBI Preferred Stock then issued and outstanding prior to
the Effective Date shall thereupon and without more be cancelled and retired and
cease to exist and no cash, stock or other property shall be delivered in
exchange therefor.
(f) If prior to the Effective Date, CBI shall issued to holders of CBI
Common Stock any shares of CBI Common Stock as a stock dividend, shall subdivide
the number of outstanding shares of CBI Common Stock into a greater number of
shares or shall contract the number of outstanding shares, then, in any such
case, the number of shares of CBI Common Stock into which shares of IBI Common
Stock are automatically convertible into as set forth in Section 5(b) hereof
shall be adjusted proportionately. For purposes of this Section of this Merger
Agreement, a dividend, subdivision or contraction shall be deemed to have become
final at the close of business on the record date fixed for determining
stockholders entitled to receive such dividend, or whose shares are to be
affected by such subdivision or contraction; provided, however, that in the
event that after such record date, but not before payment of such dividend or
before such subdivision or contraction became effective, CBI shall legally
abandon its plan to pay such dividend, or to effect such subdivision or
contraction, the number of shares of CBI Common Stock issuable on the Effective
Date of the Merger, if adjusted as hereinabove provided, shall forthwith be
readjusted to the number of shares of CBI Common Stock issuable upon the
Effective Date of the Merger which would have been in effect had such dividend,
subdivision or contraction never been declared.
(g) At or prior to the Effective Date, CBI shall designate its Transfer
Agent to act as exchange agent to receive from the holders thereof, certificates
which immediately prior to the Effective Date represented IBI Common Stock and
to exchange such certificates for certificates of CBI Common Stock and cash as
hereinbefore provided.
(h) Promptly after the Effective Date, the exchange agent shall mail to
each record holder, as of the Effective Date, of an outstanding certificate or
certificates, which prior to the Effective Date represented shares of IBI Common
Stock, a letter of transmittal (which shall specify how delivery shall be
effected, and that risk of loss and title to such certificate or certificates
shall pass only upon proper delivery of such certificate or certificates,
together with a properly executed letter of transmittal, to the exchange agent
at its address stated therein), and instructions for use in effecting the
surrender of such certificate or certificates for exchange therefor. Upon
surrender to the exchange agent of such certificate or certificates, together
with such letter of transmittal, properly executed, the exchange agent shall
exchange such certificate or certificates for shares of CBI Common Stock and pay
to such record holder any payment due for a fractional share of CBI Common Stock
as heretofore provided. Until so surrendered, each outstanding certificate or
certificates, which prior to the Effective Date represented shares of IBI Common
Stock shall be deemed for all purposes to evidence ownership of the number of
shares of CBI Common Stock, and the right to receive payment for any fractional
share of CBI Common Stock into which the shares represented by such certificate
or certificates have been changed or converted as aforesaid.
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<PAGE>
SECTION 6
On the Effective Date, IBI's obligations under its 1990 and 1986 Stock
Option Plans (collectively, the "Plans") with respect to Stock Options granted
thereunder and not therefore exercised shall be cancelled at the Effective Date
and CBI shall deliver to the holder of each such option, in respect thereof, the
number of shares of CBI Common Stock having an aggregate fair market value on
the Effective Date equal to the product of (i) the number of shares of IBI
Common Stock subject to such option and (ii) the excess, if any, of the Exchange
Ratio multiplied by the fair market value of CBI Common Stock (as defined below)
over the exercise price of such option. For purposes of this Section, the "fair
market value" with respect to a share of CBI Common Stock on the Effective Date
shall be the average closing price of such Common Stock in the New York Stock
Exchange-Composite Transactions List (as reported by The Wall Street Journal or
other authoritative source) on the first ten trading days of the fifteen trading
days immediately preceding the Effective Date of the Merger. Notwithstanding any
other provision hereof, each holder of Stock Options who would otherwise have
been entitled to receive a fraction of a share of CBI Common Stock (after taking
into account all shares to be delivered to such holder upon termination of Stock
Options) shall receive, in lieu thereof, cash in an amount equal to such
fractional part of a share of CBI Common Stock multiplied by a number derived by
multiplying the Exchange Ratio by the fair market value of CBI Common Stock (as
defined above). No such holder shall be entitled to dividends, voting rights or
any other shareholder right in respect of any fractional share.
SECTION 7
(a) The obligations of the parties hereto to effect the Merger shall be
subject to all of the terms and conditions contained in the Plan.
(b) This Merger Agreement may be terminated and the Merger abandoned by the
mutual written consent of the Boards of Directors of the parties hereto prior
to, or after the approval of the shareholders of the parties. If the Plan is
terminated pursuant to the terms thereof, then this Merger Agreement shall
terminate simultaneously, and the Merger shall be abandoned without further
action by the parties hereto.
SECTION 8
The Merger shall become effective (the "Effective Date") at the date and
time at which executed Certificate of Merger are duly filed with the New Jersey
Secretary of State in accordance with Chapter 10 of the BCA.
SECTION 9
(a) Any party to this Merger Agreement may, at any time prior to the
Effective Date, by action taken by its Board of Directors or officers thereunto
duly authorized, waive any
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<PAGE>
of the terms or conditions of this Merger Agreement, or agree to an amendment or
modification to this Merger Agreement by an agreement in writing executed in the
same manner (but not necessarily by the same persons) as this Merger Agreement.
No amendment, modification or waiver of this Merger Agreement shall be binding
unless executed in writing by the party to be bound thereby. No waiver of any of
the provisions of this Merger Agreement shall be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar), nor shall any
waiver constitute a continuing waiver unless otherwise expressly provided. IBI's
Board of Directors may authorize the amendment or supplementation of this Merger
Agreement or waiver of any provision hereof, either before or after the approval
of IBI's shareholders provided in Section 5 of the Plan (and without seeking
further shareholder approval), so long as such amendment, supplement or waiver
does not result in the reduction of the Exchange Ratio, or result in an adverse
tax or other effect to IBI's shareholders.
(b) Nothing expressed or implied in this Merger Agreement is intended or
shall be construed to confer upon or give any person, firm or corporation other
than the parties hereto any rights or remedies under or by reason of this Merger
Agreement, and there are no third-party beneficiaries of this Merger Agreement.
(c) No party hereto shall assign this Merger Agreement, or any part hereof
without the prior written consent of the other parties. Except as otherwise
provided herein, this Merger Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns.
(d) This Merger Agreement and the Plan constitute the entire agreement
between the parties pertaining to the subject matter hereof, and supersede all
prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written, of the parties, and there are no
warranties, representations, covenants or other agreements between the parties
in connection with the subject matter hereof except as specifically set forth
herein or therein.
(e) This Merger Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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<PAGE>
(f) This Merger Agreement shall be governed by the laws of the State of New
Jersey applicable to contracts executed in and to be performed exclusively
within the State of New Jersey, regardless of where it is executed.
WITNESS the signatures and seals of the Constituent Corporations on the day
and year first above written, each hereunto set by its duly authorized officers
and attested by its Secretary or Assistant Secretary, pursuant to a resolution
of the Board of Directors.
COMMERCE BANCORP, INC.
By: /s/ VERNON W. HILL, II
-----------------------------
Vernon W. Hill, II, Chairman
INDEPENDENCE BANCORP, INC.
By: /s/ JAMES R. NAPOLITANO
-----------------------------
James R. Napolitano, Chairman
-7-
EXHIBIT "B"
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT ("Option Agreement") dated as of October 15,
1996, between INDEPENDENCE BANCORP, INC. ("IBI"), a New Jersey business
corporation registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended ("Holding Company Act"), and COMMERCE BANCORP, INC.
("CBI"), a New Jersey business corporation registered as a bank holding company
under the Holding Company Act.
WITNESSETH
WHEREAS, the Boards of Directors of IBI and CBI have approved an Agreement
and Plan of Reorganization ("Reorganization Agreement") and have adopted a
related Agreement and Plan of Merger each dated as of the date hereof (together
referred to herein as the "Merger Agreements"), providing for certain
transactions pursuant to which IBI would be merged with and into CBI;
WHEREAS, as a condition to CBI's entry into the Merger Agreements and to
induce such entry, IBI has agreed to grant to CBI the option set forth herein to
purchase authorized but unissued shares of IBI Common Stock;
NOW, THEREFORE, in consideration of the premises herein contained and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Definitions.
Capitalized terms defined in the Merger Agreements and used herein shall
have the same meanings as in the Merger Agreements.
2. Grant of Option.
Subject to the terms and conditions set forth herein, IBI hereby grants to
CBI an option ("Option") to purchase up to 564,910 shares of IBI Common Stock,
at a price of $21.00 per share payable in cash as provided in Section 4 hereof;
provided, however, that in the event IBI issues or agrees to issue any shares of
IBI Common Stock in breach of its obligations under the Merger Agreements at a
price less than $21.00 per share (as adjusted pursuant to Section 6 hereof), the
exercise price shall be equal to such lesser price. Notwithstanding anything
else in this Option Agreement to the contrary, the number of shares of IBI
Common Stock subject to the Option shall be reduced to such lesser number, if
any, as may from time-to-time be necessary, but only for so long as may be
necessary, to cause CBI not to become an interested stockholder for purposes of
the New Jersey Shareholders Protection Act.
<PAGE>
3. Exercise of Option
(a) CBI may exercise the Option, in whole or part, at any time or from
time to time if a Purchase Event (as defined below) shall have occurred and be
continuing; provided that to the extent the Option shall not have been
exercised, it shall terminate and be of no further force and effect upon the
earliest to occur of (i) the Effective Date of the Merger or (ii) termination of
the Merger Agreements in accordance with the provisions thereof prior to the
occurrence of a Purchase Event (other than a termination resulting from a
willful breach by IBI of any covenant contained therein) or (iii) twelve months
after termination of the Merger Agreements if such termination follows the
occurrence of a Purchase Event or is due to a willful breach by IBI of any
covenant contained therein; and provided further that any such exercise shall be
subject to compliance with applicable provisions of law.
(b) As used herein, a "Purchase Event" shall mean any of the following
events or transactions occurring after the date hereof:
(i) IBI or any IBI subsidiary, without having received CBI's prior
written consent, shall have entered into an agreement (including
without limitation a letter of intent or similar-type document)
with any person (other than CBI or any CBI subsidiary) to (x)
merge or consolidate, or enter into any similar transaction, with
IBI or any IBI subsidiary, (y) purchase, lease or otherwise
acquire all or substantially all of the assets of IBI or any IBI
subsidiary or (z) purchase or otherwise acquire (including by way
of merger, consolidation, share exchange or any similar
transaction) securities representing 10% or more of the voting
power of IBI or any IBI subsidiary; provided, however, that in no
event shall any merger, consolidation, purchase or similar
transaction involving only IBI, IBI's Employee Stock Ownership
Plan ("ESOP") and one or more of its subsidiaries or involving
only any two or more of such subsidiaries, be deemed to be a
Purchase Event, provided any such transaction is not entered into
in violation of the terms of the Merger Agreements;
(ii) any person (other than IBI, any IBI subsidiary, the IBI
subsidiaries in a fiduciary capacity, the ESOP, CBI, affiliates
of CBI or subsidiaries of CBI in a fiduciary capacity) shall have
acquired beneficial ownership or the right to acquire beneficial
ownership of 10% or more of the outstanding shares of IBI Common
Stock (the term "beneficial ownership" for purposes of this
Option Agreement having the meaning assigned thereto in Section
13(d) of the Exchange Act and the regulations promulgated
thereunder);
(iii) any person (other than IBI, any IBI subsidiary, the ESOP, CBI or
any CBI affiliate) (x) shall have made a bona fide proposal to
IBI by public announcement or written communication that is or
becomes the subject of
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<PAGE>
public disclosure to acquire IBI or any IBI subsidiary by merger,
consolidation, purchase of all or substantially all of its assets
or any other similar transaction, (y) shall have commenced a bona
fide tender or exchange offer to purchase shares of IBI Common
Stock such that upon consummation of such offer such person would
own or control 10% or more of the outstanding shares of IBI
Common Stock, or (z) shall have filed an application or notice
with the Federal Reserve Board or any other federal or state
regulatory agency for clearance or approval to engage in any
transaction described in clause (i) or (ii) above, and thereafter
the holders of IBI Common Stock shall have not approved the
Merger Agreements and the transactions contemplated thereby at
the meeting of such stockholders held for such purpose or such
meeting shall not have been held or shall have been cancelled
prior to termination of the Merger Agreements; or
(iv) IBI or any IBI subsidiary shall have breached any of its
obligations under the Merger Agreements.
If more than one of the transactions giving rise to a Purchase Event under this
Section 3(b) is undertaken or effected, then all such transactions shall give
rise only to one Purchase Event, which Purchase Event shall be deemed continuing
for all purposes hereunder until all such transactions are abandoned. As used in
this Option Agreement, "person" shall have the meanings specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act.
(c) In the event CBI wishes to exercise the Option, it shall send to IBI a
written notice, (the date of which being herein referred to as "Notice Date")
specifying (i) the total number of shares it will purchase pursuant to such
exercise, and (ii) a place and date not earlier than three business days nor
later than 60 business days from the Notice Date for the closing of such
purchase ("Closing Date"); provided that if prior notification to or approval of
any federal or state regulatory agency is required in connection with such
purchase, CBI shall promptly file (with the full cooperation and assistance of
IBI) the required notice or application for approval and shall expeditiously
process the same and the period of time that otherwise would run pursuant to
this sentence shall run instead from the date on which any required notification
period has expired or been terminated or such approval has been obtained and any
requisite waiting period shall have passed. Notwithstanding the foregoing, the
obligation of IBI to issue shares upon exercise of the Option and/or repurchase
the Option as set forth in Section 7 hereof shall be deferred (but shall not
terminate) (i) until the receipt of all required governmental or regulatory
approvals or consents necessary for IBI to issue the shares (or repurchase the
Option), or CBI to exercise the Option, or until the expiration or termination
of any waiting period required by law, or (ii) so long as any injunction or
other order, decree or ruling issued by any federal or state court of competent
jurisdiction is in effect which prohibits the sale or delivery of the shares (or
repurchase of the Option), and, in each case, notwithstanding any provision to
the contrary set forth herein, the Option (and obligation to repurchase the
Option) shall not expire or otherwise terminate.
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<PAGE>
(d) IBI shall notify CBI promptly in writing of the occurrence of any
Purchase Event known to it, it being understood that the giving of such notice
by IBI shall not be a condition to the right of CBI to exercise the Option. IBI
will not take any action which would have the effect of preventing or disabling
IBI from delivering the shares to CBI upon exercise of the Option or otherwise
performing its obligations under this Option Agreement.
4. Payment and Delivery of Certificates.
(a) At the closing referred to in Section 3 hereof, CBI shall pay to IBI
the aggregate purchase price for the shares of IBI Common Stock purchased
pursuant to the exercise of the option in immediately available funds by a wire
transfer to a bank account designated by IBI.
(b) At such closing, simultaneously with the delivery of cash as provided
in subsection (a), IBI shall deliver to CBI a certificate or certificates
representing the number of shares of IBI Common Stock purchased by CBI, and CBI
shall deliver to IBI a letter agreeing that CBI will not offer to sell or
otherwise dispose of such shares in violation of applicable law or the
provisions of this Option Agreement.
(c) Certificates for IBI Common Stock delivered at a closing hereunder may
be endorsed with a restrictive legend which shall read substantially as follows:
"The transfer of the shares represented by this certificate is
subject to certain provisions of an agreement between the registered
holder hereof and Independence Bancorp, Inc. and to resale
restrictions arising under the Securities Act of 1933, as amended, a
copy of which agreement is on file at the principal office of
Independence Bancorp, Inc. A copy of such agreement will be provided
to the holder hereof without charge upon receipt by Independence
Bancorp, Inc. of a written request."
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if CBI shall have delivered to
IBI a copy of a letter from the Staff of the Commission, or an opinion of
counsel, in form and substance satisfactory to IBI, to the effect that such
legend is not required for purposes of the Securities Act.
5. Representations.
IBI hereby represents, warrants and covenants to CBI as follows:
(a) IBI shall at all times maintain sufficient authorized but unissued
shares of IBI Common Stock so that the Option may be exercised without
authorization of additional shares of IBI Common Stock.
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<PAGE>
(b) The shares to be issued upon due exercise, in whole or in part, of the
Option, when paid for as provided herein, will be duly authorized, validly
issued, fully paid and nonassessable.
(c) IBI has full corporate power and authority to execute, deliver and
perform this Option Agreement and all corporate action necessary for execution,
delivery and performance of this Option Agreement has been duly taken by IBI.
This Option Agreement constitutes a legal, valid and binding obligation of IBI,
enforceable against IBI in accordance with its terms.
6. Adjustment Upon Changes in Capitalization.
In the event of any change in IBI Common Stock by reason of stock
dividends, split-ups, recapitalizations, combinations, exchanges of shares or
the like, the type and number of shares subject to the Option, and the purchase
price per share, as the case may be, shall be adjusted appropriately. In the
event that any additional shares of IBI Common Stock are issued or otherwise
become outstanding after the date of this Option Agreement (other than pursuant
to this Option Agreement), the number of shares of IBI Common Stock subject to
the Option shall be adjusted so that, after such issuance, it equals 19.99% of
the number of shares of IBI Common Stock then issued and outstanding without
giving effect to any shares subject or issued pursuant to the Option. Nothing
contained in this Section 6 shall be deemed to authorize IBI to breach any
provision of the Merger Agreements.
7. Repurchase of Option.
(a) Upon the occurrence of a Purchase Event, at the request of CBI,
delivered within 60 days of such occurrence, IBI shall repurchase the Option
from CBI at a price (the "Option Repurchase Price") equal to the amount by which
the market/offer price (as defined below) exceeds the exercise price, multiplied
by the number of shares for which this Option may then be exercised. The term
"market/offer price" shall mean the highest of (i) the price per share of IBI
Common Stock at which a tender offer or exchange offer therefor has been made,
(ii) the price per share of IBI Common Stock to be paid by any third party
pursuant to an agreement with IBI, or (iii) in the event of a sale of all or
substantially all of IBI's and any IBI subsidiary's assets, the sum of the price
paid in such sale for such assets and the current market value of the remaining
assets of IBI as determined by an investment banking firm selected by CBI,
divided by the number of shares of IBI Common Stock outstanding at the time of
such sale. In determining the market/offer price, the value of consideration
other than cash shall be determined by an investment banking firm selected by
CBI.
(b) CBI may exercise its right to require IBI to repurchase the Option
pursuant hereto by surrendering for such purpose to IBI, at its principal
office, a copy of this Option Agreement, accompanied by a written notice or
notices stating that CBI elects to require IBI to repurchase this Option in
accordance with the provisions hereof. As promptly as practicable, and in any
event within five business days after the surrender of the Option and the
receipt of such notice
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<PAGE>
or notices relating thereto, IBI shall deliver or cause to be delivered to CBI
the Option Repurchase Price thereof.
8. Filings and Consents.
Each of CBI and IBI will use its best efforts to make all filings with,
and to obtain consents of, all third parties and governmental authorities
necessary to the consummation of the transactions contemplated by this Option
Agreement.
9. Registration Rights.
IBI shall, if requested by CBI, as expeditiously as possible following the
occurrence of a Purchase Event and prior to the second anniversary thereof, file
a registration statement on a form of general use under the Securities Act if
necessary in order to permit the sale or other disposition of the shares of IBI
Common Stock that have been acquired upon exercise of the option in accordance
with the intended method of sale or other disposition requested by CBI. CBI
shall provide all information reasonably requested by IBI for inclusion in any
registration statement to be filed hereunder. IBI will use its best efforts to
cause such registration statement first to become effective and then to remain
effective for such period not in excess of 180 days from the day such
registration statement first becomes effective as may be reasonably necessary to
effect such sales or other dispositions by CBI. The obligations of IBI hereunder
to file a registration statement and to maintain its effectiveness may be
suspended for one or more periods of time not exceeding 60 days in the aggregate
if the Board of Directors of IBI shall have determined that the filing of such
registration statement or the maintenance of its effectiveness would require
disclosure of non-public information that would materially and adversely affect
IBI. The first registration effected under this Section 9 shall be at IBI's
expense except for underwriting commissions and the fees and disbursements of
CBI's counsel attributable to the registration of such IBI Common Stock. A
second registration may be requested hereunder at CBI's expense. In no event
shall IBI be required to effect more than two registrations hereunder. The
filing of any registration statement hereunder may be delayed for such period of
time as may reasonably be required to facilitate any public distribution by IBI
of IBI Common Stock. If requested by CBI, in connection with any such
registration, IBI will become a party to any underwriting agreement relating to
the sale of such shares, but only to the extent of obligating itself in respect
of representations, warranties, indemnities and other agreements customarily
included by an issuing company in such underwriting agreements between an
underwriter and selling shareholder. Upon receiving any request from CBI or
assignee thereof under this Section 9, IBI agrees to send a copy thereof to CBI
and to any assignee thereof known to IBI, in each case by promptly mailing the
same, postage prepaid, to the address of record of the persons entitled to
receive such copies.
10. Severability.
If any term, provision, covenant or restriction contained in this Option
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void
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<PAGE>
or unenforceable, the remainder of the terms, provisions and covenants and
restrictions contained in this Option Agreement shall remain in full force and
effect, and shall in no way be affected, impaired or invalidated. If for any
reason such court or regulatory agency determines that the option will not
permit the holder to acquire the full number of shares of IBI Common Stock
provided in Section 2 hereof (as adjusted pursuant to Section 6 hereof), it is
the express intention of IBI to allow the holder to acquire or to require IBI to
repurchase such lesser number of shares as may be permissible, without any
amendment or modification hereof.
11. Miscellaneous.
(a) Expenses. Except as otherwise provided herein, each of the parties
hereto shall bear and pay all costs and expenses incurred by it or on its behalf
in connection with the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers, accountants and
counsel.
(b) Entire Agreement. Except as otherwise expressly provided herein, this
Option Agreement contains the entire agreement between the parties with respect
to the transactions contemplated hereunder and supersedes all prior arrangements
or understandings with respect thereto, written or oral. The terms and
conditions of this Option Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns. Nothing in
this Option Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Option Agreement, except as expressly provided herein.
(c) Assignment. Neither of the parties hereto may assign any of its rights
or obligations under this Option Agreement or the Option created hereunder to
any other person, without the express written consent of the other party, except
that in the event a Purchase Event shall have occurred and be continuing CBI may
assign in whole or in part its rights and obligations hereunder; provided,
however, that until the date 30 days following the date on which the Federal
Reserve Board approves an application by CBI under the Holding Company Act to
acquire the shares of IBI Common Stock subject to the Option, CBI may not assign
its rights under the option except in (i) a widely dispersed public
distribution, (ii) a private placement in which no one party acquires the right
to purchase
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<PAGE>
in excess of 5% of the voting shares of IBI, (iii) an assignment to a single
party (e.g., a broker or investment banker) for the purpose of conducting a
widely dispersed public distribution on CBI's behalf, or (iv) any other manner
approved by the Federal Reserve Board.
(d) Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by overnight express or by registered or certified mail, postage
prepaid, addressed as provided in the Reorganization Agreement. A party may
change its address for notice purposes by written notice to the other party
hereto.
(e) Counterparts. This Option Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
(f) Specific Performance. The parties agree that damages would be an
inadequate remedy for a breach of the provisions of this Option Agreement by
either party hereto and that this Option Agreement may be enforced by either
party hereto through injunctive or other equitable relief.
(g) Governing Law. This Option Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey applicable to
agreements made and entirely to be performed within such state and such federal
laws as may be applicable.
IN WITNESS WHEREOF, each of the parties hereto has executed this Option
Agreement as of the day and year first written above.
COMMERCE BANCORP, INC.
By: /s/ VERNON W. HILL, II
-----------------------------
Vernon W. Hill, II, Chairman
INDEPENDENCE BANCORP, INC.
By: /s/ JAMES R. NAPOLITANO
-----------------------------
James R. Napolitano, Chairman
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