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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):
March 27, 2000
Union Bankshares Company
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(Exact Name of Registrant as specified in its charter)
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MAINE 2-90679 01-0395131
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(State or other jurisdiction of (Commission File Number) (IRS employer
incorporation) Identification No.)
66 Main Street, Ellsworth, Maine 04605
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(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (207) 667-2504
No Change
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(Registrant's former address of principal executive offices)
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Item 5. Other Events.
On March 27, 2000, Union Bankshares Company ("Union Bankshares")
entered into an Agreement and Plan of Merger (the "Merger Agreement") with
Mid-Coast Bancorp, Inc. ("Mid-Coast"), which provides for a merger of Mid-Coast
with and into Union Bankshares (the "Proposed Merger"). The Proposed Merger is
conditioned upon, among other things, approval by the shareholders of each of
Union Bankshares and Mid-Coast and the receipt of certain regulatory approvals.
In connection with the Proposed Merger, each outstanding share of common stock
of Mid-Coast, except for shares held by persons exercising statutory appraisal
rights, will be converted into the right to receive $15.875 in cash, upon the
terms and conditions set forth in the Merger Agreement. Pursuant to the Merger
Agreement, The Waldoboro Bank, F.S.B., a wholly owned subsidiary of Mid-Coast,
will be merged with and into Union Trust Company, a wholly owned subsidiary of
Union Bankshares, simultaneously with or immediately subsequent to the
consummation of the Proposed Merger.
In connection with the Merger Agreement, Union Bankshares and Mid-Coast
have also entered into an Option Agreement, dated March 27, 2000 (the "Option
Agreement"). Pursuant to the Option Agreement, among other things, Mid-Coast has
granted to Union Bankshares an option to purchase, under certain circumstances,
up to 19.9% of the outstanding shares of Mid-Coast common stock at a price of
$6.00 per share, upon the terms and conditions set forth in the Option
Agreement.
Information contained in the exhibits to this current report on Form
8-K may contain statements which are forward-looking in nature, such as
references to strategic plans and expectations. These forward-looking statements
are inherently uncertain, and actual results may differ from Union Bankshares'
expectations. Risk factors that could impact current and future performance
could include but are not limited to: failure to realize or realize fully within
the expected time frame anticipated benefits from the Proposed Merger; difficult
or costly integration of the businesses; adverse changes in the economy of Union
Bankshares' primary market; and changing requirements of federal and state bank
regulatory agencies that could materially impact future operations of Union
Bankshares.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
2.1 Agreement and Plan of Merger dated March 27, 2000, between Union
Bankshares Company and Mid-Coast Bancorp, Inc.
10.1 Option Agreement dated March 27, 2000 between Union Bankshares Company
and Mid-Coast Bancorp, Inc.
99.1 Press Release dated March 28, 2000 announcing the Proposed Merger.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: March 31, 2000 UNION BANKSHARES COMPANY
By: /s/ Peter A. Blyberg
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Name: Peter A. Blyberg
Title: President
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Exhibit Index
2.1 Agreement and Plan of Merger dated March 27, 2000 between Union
Bankshares Company and Mid-Coast Bancorp, Inc.
10.1 Option Agreement dated March 27, 2000 between Union Bankshares Company
and Mid-Coast Bancorp, Inc.
99.1 Press Release dated March 28, 2000 announcing the Proposed Merger.
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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
UNION BANKSHARES COMPANY
AND
MID-COAST BANCORP, INC.
MARCH 27, 2000
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THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of the
27th day of March, 2000, is made between Mid-Coast Bancorp, Inc., Waldoboro,
Maine, a Delaware corporation ("Mid-Coast") and Union Bankshares Company,
Ellsworth, Maine, a Maine corporation ("Union Bankshares").
PREAMBLE
The respective Boards of Directors of Union Bankshares and Mid-Coast
are of the opinion that the transactions described herein are in the best
interests of the parties to this Agreement and their respective stockholders.
This Agreement provides for the acquisition of Mid-Coast by Union Bankshares
pursuant to the merger of Mid-Coast with and into Union Bankshares. At the
effective date of such merger, the outstanding shares of capital stock of
Mid-Coast shall be converted into the right to receive cash. The transactions
described in this Agreement are subject to the approvals of the stockholders of
Mid-Coast and Union Bankshares, respectively, expiration of the required waiting
period under applicable federal and state regulatory laws and regulations, and
the satisfaction of certain other conditions described in this Agreement.
Simultaneously with the execution and delivery of this Agreement, and
as a condition and inducement to the willingness of Union Bankshares and
Mid-Coast to enter into this Agreement, Mid-Coast and Union Bankshares are
entering into an Option Agreement pursuant to which Mid-Coast is granting to
Union Bankshares an option to purchase shares of Mid-Coast Common Stock.
Now, therefore, in consideration of their mutual promises and
obligations, the parties agree that Mid-Coast shall be merged with and into
Union Bankshares on the terms and subject to the conditions set forth in this
Agreement:
ARTICLE 1
DEFINITIONS
Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meaning to be equally applicable to both
the singular and plural forms of the terms defined):
1.1 "1933 Act" shall mean the Securities Act of 1933, as amended.
1.2 "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.3 "Affiliate" of a Person shall mean: (i) any other Person directly,
or indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person; or (ii) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 10% or greater equity or
voting interest of such Person.
1.4 "Agreement" shall mean this Agreement and Plan of Merger by and
between Mid-Coast and Union Bankshares, and any amendments thereto. References
to Articles,
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Sections, Schedules and the like refer to the Articles, Sections, Schedules and
the like of this Agreement unless otherwise indicated.
1.5 "Assets" of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character and
description, whether real, personal or mixed, tangible or intangible, accrued or
contingent, or otherwise relating to or utilized in such Person's business,
directly or indirectly, in whole or in part, whether or not carried on the books
and records of such Person, and whether or not owned in the name of such Person
or any Affiliate of such Person and wherever located.
1.6 "BHCA" shall mean the Bank Holding Company Act of 1956, as amended.
1.7 "Bank Regulator" shall mean and include, any pertinent federal or
state Regulatory Authority charged with the supervision of banks, bank holding
companies, savings associations, or savings association holding companies or
engaged in the insurance of bank or savings association deposits, including
without limitation, the FRB, the FDIC, the OTS and the Bureau of Banking.
1.8 "Bureau of Banking" means the Bureau of Banking of the Department
of Professional and Financial Regulation of the State of Maine having regulatory
authority over Union Trust or any successor Maine governmental agency exercising
such regulatory authority.
1.9 "Business Day" shall mean a day on which Union Trust is open for
business and which is not a Saturday, Sunday or legal bank holiday.
1.10 "Closing" The closing of the transactions contemplated herein will
take place at a place that is mutually agreed to by the parties and on the date
that is the last Business Day of the month during which all of the following are
then complete:
(i) all applicable regulatory approvals relating to the
transactions contemplated herein have been received; and
(ii) all applicable statutory and regulatory waiting periods
relative to the Merger and the Subsidiary Merger have expired;
and
(iii) the Mid-Coast stockholders have approved the Agreement; and
(iv) the Union Bankshares stockholders have approved the Agreement,
or such earlier or later date as may be agreed to by the parties. At the Closing
the parties shall each deliver to the other such evidence of the satisfaction of
the conditions to the Merger (as defined in Section 2.1 hereof and the
Subsidiary Merger) as may reasonably be required (including material required to
be delivered pursuant to this Agreement).
1.11 "Consent" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person pursuant to
any Contract, Law, Order, or Permit.
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1.12 "Contract" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease, obligation,
plan, practice, restriction, understanding, or undertaking of any kind or
character, or other document to which any Person is a party or that is binding
on any Person or its capital stock, Assets or business.
1.13 "Default" shall mean (i) any breach or violation of, default
under, contravention of, or conflict with, any Contract, Law, Order, or Permit,
(ii) any occurrence of any event that with the passage of time or the giving of
notice or both would constitute a breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order, or Permit, or
(iii) any occurrence of any event that with or without the passage of time or
the giving of notice would give rise to a right of any Person to exercise any
remedy or obtain any relief under, terminate or revoke, suspend, cancel, or
modify or change the current terms of, or renegotiate, or to accelerate the
maturity or performance of, or to increase or impose any Liability under, any
Contract, Law, Order, or Permit, where, in any such event, such Default is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Mid-Coast.
1.14 "Effective Date" The Merger shall become effective as of the date
and time when the Articles of Merger filed with the Secretary of State of the
State of Maine pursuant to the provisions of Article 11 of the Maine Business
Corporation Act (the "MBCA") shall be effective and the Certificate of Merger
filed with the Delaware Secretary of State pursuant to Section 252 of the
Delaware General Corporation Law (the "DGCL") shall be effective.
1.15 "Exchange Agent" shall mean the Person engaged by Union Bankshares
to act as agent for the exchange of Mid-Coast Common Stock for Merger
Consideration.
1.16 "FDIA" shall mean the Federal Deposit Insurance Act, as amended.
1.17 "FDIC" means that agency of the United States of America known as
the Federal Deposit Insurance Corporation, or any successor United States
Governmental Agency which insures deposits of commercial or savings banks.
1.18 "FRB" means that agency of the United States of America known as
the Federal Reserve Board which acts in the capacity of a governmental central
bank known as the Federal Reserve System represented by actions of its Board of
Governors, having regulatory authority over bank holding companies and certain
banks that are members of the Federal Reserve System or any successor United
States governmental agency performing the function of exercising such regulatory
authority.
1.19 "Governmental Authority" shall mean any United States federal,
state or local governmental commission, board or other regulatory authority or
agency, including courts and other judicial bodies and including without
limitation, any Regulatory Authority and any Bank Regulator.
1.20 "Hazardous Materials" shall mean (a) any hazardous or toxic
wastes, materials or substances, and other pollutants or contaminants, which are
or hereafter become regulated by or under any Environmental Laws; (b) petroleum,
petroleum products, petroleum byproducts, crude oil or any fraction thereof; (c)
asbestos; (d) polychlorinated biphenyls; (e) radioactive materials; (f) any
other substance requiring special handling under any Environmental Laws; (g) any
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materials which cause a nuisance upon a waste to any Property; and (h) any other
material or substance displaying toxic, reactive, ignitable or corrosive
characteristics, as all such terms are used in their broadest sense, and are
defined or become defined by or under any Environmental Law.
1.21 "Knowledge" as used with respect to a Person (including references
to such Person being aware of a particular matter) shall mean those facts that
are known after due inquiry by the officers and directors of such Person.
1.22 "Law" shall mean any code, law (including common law), ordinance,
regulation, reporting or licensing requirement, rule, or statute applicable to a
Person or its Assets, Liabilities, or business, including those promulgated,
interpreted or enforced by any Regulatory Authority.
1.23 "Liability" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or expense
(including costs of investigation, collection and defense), claim, deficiency,
guaranty or endorsement of or by any Person (other than endorsements of notes,
bills, checks, and drafts presented for collection or deposit in the ordinary
course of business) of any type, whether accrued, absolute or contingent,
liquidated or unliquidated, matured or unmatured, or otherwise.
1.24 "Lien" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title retention
or other security arrangement, or any adverse right or interest, charge, or
claim of any nature whatsoever of, on, or with respect to any property or
property interest, other than (i) Liens for current property Taxes not yet due
any payable, and (ii) Liens which do not materially impair the use of or title
to the Assets subject to such Lien.
1.25 "Litigation" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, governmental or other examination or
investigation, hearing, administrative or other proceeding relating to or
affecting a Party, its business, its Assets (including Contracts related to it),
or the transactions contemplated by this Agreement.
1.26 "Merger Consideration" shall mean $15.875 per share of Mid-Coast
Common Stock.
1.27 "Material Adverse Effect" shall mean, with respect to any Person,
a change or effect that is or is reasonably likely to be materially adverse to
the business, results of operations or financial condition of such Person taken
as a whole; provided, however, that "Material Adverse Effect" shall not be
deemed to include the impact of (a) changes in laws and regulations or
interpretations thereof by Governmental Authorities generally applicable to
depository institutions and their holding companies (including changes in
insurance deposit assessment rates and special assessments with respect
thereto), (b) changes in GAAP or regulatory accounting principles generally
applicable to financial institutions and their holding companies, (c) actions
and omissions of a Party taken with the prior written consent of the other
Party, and (d) the direct effects of compliance with this Agreement on the
operating performance of the Parties including expenses incurred by the Parties
hereto in consummating the transactions contemplated by this Agreement.
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1.28 "Mid-Coast" means Mid-Coast Bancorp, Inc., a corporation duly
chartered, organized, and existing under and pursuant to the laws of the State
of Delaware; maintaining its principal place of business at 1768 Atlantic
Highway, Waldoboro, Maine 04572.
1.29 "Mid-Coast Common Stock" means the shares of Common Stock of
Mid-Coast, $1.00, par value per share.
1.30 "NASD" means the National Association of Securities Dealers, Inc.
1.31 "Order" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or writ
of any federal, state, local or foreign or other court, arbitrator, mediator,
tribunal, administrative agency, or Regulatory Authority.
1.32 "OTS" means the Office of Thrift Supervision having regulatory
authority over Mid-Coast and Waldoboro.
1.33 "Party" shall mean Union Bankshares or Mid-Coast and "Parties"
shall mean Union Bankshares and Mid-Coast.
1.34 "Permit" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing, franchise,
license, notice, permit, or right to which any Person is a party or that is or
may be binding upon or inure to the benefit of any Person or its securities,
Assets, or business.
1.35 "Person" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting in a
representative capacity.
1.36 "Property" shall mean any property owned, leased, or operated by
the Party in question or by any of its Subsidiaries or in which such Party or
Subsidiary holds a security interest or other interest (including an interest in
a fiduciary capacity), and, where required by the context, includes the owner or
operator of such property, but only with respect to such property.
1.37 "Public Announcement" shall mean a written press release, public
announcement or public information disclosure by Mid-Coast or Union Bankshares
or any of their Subsidiaries relating to the Merger or the other transactions
contemplated hereby.
1.38 "Regulatory Authorities" shall mean, collectively, the SEC, the
NASD, the United States Department of Justice, any Bank Regulator and all other
federal, state, county, local or other governmental or regulatory agencies,
authorities (including self-regulatory authorities), instrumentalities,
commissions, boards or bodies having jurisdiction over the Parties and their
respective Subsidiaries.
1.39 "Representative" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative engaged by a
Person.
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1.40 "SEC" means that agency of the United States of America known as
the Securities and Exchange Commission.
1.41 "SEC Documents" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed, or
required to be filed, by a Party or any of its Subsidiaries with any Regulatory
Authority pursuant to the Securities Laws.
1.42 "Securities Laws" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of 1940,
as amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder.
1.43 "Subsidiaries" shall mean all those corporations, associations, or
other business entities of which the entity in question either (i) owns or
controls 25% or more of the outstanding equity securities either directly or
through an unbroken chain of entities as to each of which 25% or more of the
outstanding equity securities is owned directly or indirectly by its parent
(provided, there shall not be included any such entity the equity securities of
which are owned or controlled in a fiduciary capacity), (ii) in the case of
partnerships, serves as a general partner, (iii) in the case of limited
liability company, serves as a managing member, or (iv) otherwise has the
ability to elect a majority of the directors, trustees or managing members
thereof.
1.44 "Subsidiary Merger" shall mean the merger of Waldoboro with and
into Union Trust as contemplated in this Agreement and the Subsidiary Merger
Agreement.
1.45 "Subsidiary Merger Agreement" means the Subsidiary Merger
Agreement by and between Union Trust and Waldoboro in substantially the form of
Exhibit A hereto.
1.46 "Surviving Corporation" shall mean Union Bankshares as the
surviving corporation resulting from the Merger.
1.47 "Tax" or "Taxes" shall mean any federal, state, county, local, or
foreign taxes, charges, fees, levies, imposts, duties, or other assessments,
including income, gross receipts, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties, capital
stock, paid-up capital, profits, withholding, Social Security, single business
and unemployment, disability, real property, personal property, registration, ad
valorem, value added, alternative or add-on minimum, estimated, or other tax or
governmental fee of any kind whatsoever, imposed or required to be withheld by
the United States or any state, county, local or foreign government or
subdivision or agency thereof, including any interest, penalties, and additions
imposed thereon or with respect thereto.
1.48 "Tax Return" shall mean any report, return, information return, or
other information required to be supplied to a taxing authority in connection
with Taxes, including any return of an affiliated or combined or unitary group
that includes a Party or its Subsidiaries.
1.49 "Transaction Documents" shall mean this Agreement, the Subsidiary
Merger Agreement and the Option Agreement.
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1.50 "Union Bankshares" means Union Bankshares Company, a corporation
duly chartered, organized and existing under and pursuant to the laws of the
State of Maine; maintaining its principal place of business at 66 Main Street,
Ellsworth, Maine 04605.
1.51 "Union Trust" means Union Trust Company, a Maine banking
corporation, duly chartered, organized and existing under and pursuant to the
laws of the State of Maine and maintaining its principal place of business at 66
Main Street, Ellsworth, Maine 04605 and a member of the Federal Reserve System.
1.52 "Waldoboro" means The Waldoboro Bank, F.S.B., a federally
chartered savings bank, organized and existing under and pursuant to the laws of
the United States of America and maintaining its principal place of business and
registered address at 1768 Atlantic Highway, Waldoboro, Maine 04572, and its
subsidiary, First Waldoboro Corporation.
Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include", or
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
ARTICLE 2
THE MERGER
2.1 Merger. On the Effective Date, Mid-Coast shall be merged with and
into Union Bankshares (the "Merger") pursuant to the provisions of this
Agreement, the provisions of and with the effect provided in, Chapter 9 of the
MBCA and Section 252 of the DGCL and this Agreement.
2.2 The Closing.
(a) The Closing of the transactions contemplated herein will take
place, assuming satisfaction or waiver of each of the conditions set forth in
Article 8 hereof, on or immediately prior to the Effective Date. The Closing
shall be held at such location as may be mutually agreed upon by Parties.
(b) At the Closing (i) Mid-Coast and Union Bankshares shall each
provide to the other such proof of satisfaction of the conditions set forth in
Article 8 as the Party whose obligations are conditioned upon such satisfaction
may reasonably request; (ii) the certificates and letters required by Article 8
shall be delivered; (iii) the appropriate officers of the Parties shall complete
the execution, acknowledgment and delivery of the Merger Agreement and the
Subsidiary Merger Agreement; and (iv) the Parties shall take such further action
as is required to consummate the transactions contemplated by this Agreement and
the Subsidiary Merger Agreement.
2.3 Effect of Merger. Upon consummation of the Merger, the separate
corporate existence of Mid-Coast shall cease and Union Bankshares shall continue
as the surviving corporation. The name of Union Bankshares, as the surviving
corporation, shall by virtue of the Merger remain unchanged. On the Effective
Date, all of the Assets then owned by Mid-Coast, or which would inure to it,
shall immediately by operation of law and without any conveyance or
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transfer or without any further action or deed, be vested in and become the
property of Union Bankshares, which shall have, hold and enjoy the same in its
own right as fully and to the same extent as the same were possessed, held and
enjoyed by Mid-Coast prior to such Merger, and Union Bankshares shall be a
continuation of the original entities and all of the rights and obligations of
Mid-Coast shall remain unimpaired, and Union Bankshares, on the Effective Date
of the Merger shall succeed to all such rights, obligations, duties and
liabilities connected therewith.
2.4 Subsidiary Merger. Union Bankshares and Mid-Coast shall take all
action necessary and appropriate to cause Waldoboro to merge into Union Trust
simultaneously with or immediately subsequent to the consummation of the Merger
under the terms set forth in the Subsidiary Merger Agreement.
2.5 Option Agreement. Simultaneously with the execution of this
Agreement and as a condition thereto, the parties shall have executed an Option
Agreement (the "Option Agreement") substantially in the form of Exhibit B
hereto, providing Union Bankshares an option to acquire up to 19.9% of the
outstanding shares of Mid-Coast Common Stock, if certain triggering events occur
as described therein.
2.6 Charter. The Articles of Incorporation of Union Bankshares in
effect immediately prior to the Effective Date shall be the Articles of
Incorporation of the Surviving Corporation until duly amended or repealed.
2.7 ByLaws. The Bylaws of Union Bankshares in effect immediately prior
to the Effective Date shall be the Bylaws of the Surviving Corporation until
duly amended or repealed.
2.8 Directors and Officers.
(a) The directors of Union Bankshares in office immediately prior
to the Effective Date, together with such additional persons as may thereafter
be elected, shall serve as the directors of the Surviving Corporation from and
after the Effective Date in accordance with the Bylaws of the Surviving
Corporation. The officers of Union Bankshares in office immediately prior to the
Effective Date, together with such additional persons as may thereafter be
elected, shall serve as the officers of the Surviving Corporation from and after
the Effective Date in accordance with the Bylaws of the Surviving Corporation.
(b) Upon the Effective Date, Union Bankshares shall take, or cause
to be taken, such action as may be required in order to appoint two new
Directors to its Board of Directors from the current Mid-Coast Board of
Directors who shall represent the mid-coast banking market. Any person who is
appointed or elected to the Board of Directors of Union Bankshares pursuant to
the preceding sentence, shall serve until the first annual meeting of
stockholders of Union Bankshares following the Effective Date and until his or
her successor is elected and qualified.
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ARTICLE 3
CONVERSION AND CANCELLATION OF STOCK
3.1 Conversion of Mid-Coast Common Stock.
(a) On the Effective Date, each shareholder of Mid-Coast Common
Stock issued and outstanding immediately prior to the Effective Date, other than
holders of shares of Mid-Coast Common Stock who pursuant to Section 262 of the
DGCL dissent and perfect appraisal rights, shall by virtue of the Merger become
and be converted to the right to receive the Merger Consideration in cash for
each share of Mid-Coast Common Stock held by such shareholder. On the Effective
Date, all shares of Mid-Coast Common Stock held in treasury will be canceled and
terminated and Mid-Coast shall not have any rights to receive Merger
Consideration for such shares.
(b) Anti-Dilution Provisions. The Merger Consideration shall be
proportionately adjusted to reflect fully the effect of any stock split, stock
dividend (including any dividend or distribution of securities convertible into
Mid-Coast Common Stock), recapitalization, reorganization or other like change
with respect to such stock if the record date therefore (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split,
recapitalization, reorganization or similar change for which a record date is
not established) shall be prior to the Effective Date.
(c) Cancellation. As a result of the Merger and without any action
on the part of the holder thereof, on the Effective Date, all shares of
Mid-Coast Common Stock shall cease to be outstanding and shall be canceled and
retired and shall cease to exist, and each holder of a certificate (a
"Certificate") representing any shares of Mid-Coast Common Stock shall
thereafter cease to have any rights with respect to such shares of Mid-Coast
Common Stock, except the right to receive, without interest, the Merger
Consideration, upon the terms set forth in this Agreement.
ARTICLE 4
EXCHANGE AND PAYMENT
4.1 Exchange of Certificates Representing Mid-Coast Common Stock.
(a) As of the Effective Date, Union Bankshares shall deposit, or shall
cause to be deposited, with the Exchange Agent for the benefit of the holders of
shares of Mid-Coast Common Stock, for exchange in accordance with this Article
4, the Merger Consideration (the aggregate of such cash being hereinafter
referred to as the "Exchange Fund") to be paid pursuant to Articles 3 and 4, in
exchange for outstanding shares of Mid-Coast Common Stock.
(b) Within two (2) business days after the Effective Date Union
Bankshares shall cause the Exchange Agent to mail to each holder of record of a
Certificate or Certificates (other than those representing shares with respect
to which the holder thereof has perfected appraisal rights under the DGCL and
has not subsequently lost, withdrawn or forfeited such rights) (i) a letter of
transmittal which shall specify that delivery shall be effected, and risk of
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loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as Union Bankshares may reasonably specify and (ii) instructions for
use in effecting the surrender of the Certificates in exchange for the per share
Merger Consideration. Upon surrender of a Certificate for cancellation to the
Exchange Agent together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, the holder of such
Certificate shall be entitled to receive in exchange therefore a check in the
amount of Merger Consideration that such holder has the right to receive
pursuant to this Agreement after giving effect to any required withholding tax,
and the Certificate so surrendered shall forthwith be canceled. No interest will
be paid or accrued on the value of any Merger Consideration payable to holders
of Certificates. In the event of a transfer of ownership of Mid-Coast Common
Stock which is not registered in the transfer records of Mid-Coast, a check in
the amount of Merger Consideration that such holder has the right to receive
pursuant to this Agreement after giving effect to any required withholding tax,
may be issued to such a transferee if the Certificate representing such
Mid-Coast Common Stock is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid.
(c) Notwithstanding any other provisions of this Agreement, except
with respect to dividends declared by the Board of Directors of Mid-Coast which
are consistent with past practice, no dividends shall be paid with respect to
any shares of Mid-Coast Common Stock represented by a Certificate until such
Certificate is surrendered for exchange as provided herein.
(d) On or after the Effective Date, there shall be no transfers on
the stock transfer books of Mid-Coast of the shares of Mid-Coast Common Stock
that were outstanding immediately prior to the Effective Date. If, after the
Effective Date, Certificates are presented to Union Bankshares, they shall be
canceled and exchanged for the amount of Merger Consideration that such holder
has the right to receive pursuant to this Agreement.
(e) Any portion of the cash (including the proceeds of any
investments thereof) that remains unclaimed by the former stockholders of
Mid-Coast six months after the Effective Date shall be delivered to Union
Bankshares. Any former stockholders of Mid-Coast who have not complied with this
Article 4 before that date shall look only to Union Bankshares for payment in
respect of their shares, without any interest thereon.
(f) Any other provision of this Agreement notwithstanding, neither
Mid-Coast, the Surviving Corporation nor the Exchange Agent shall be liable to a
holder of Mid-Coast Common Stock for any amounts paid or properly delivered in
good faith to a public official pursuant to any applicable abandoned property,
escheat or similar Law.
(g) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by Union
Bankshares, the posting by such Person of a bond in such reasonable amount as
Union Bankshares may direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent will issue in
exchange for such lost, stolen or destroyed Certificate cash as provided in
Section 4.1(b).
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(h) Adoption of this Agreement by the stockholders of Mid-Coast
shall constitute ratification of the appointment of the Exchange Agent.
4.2 Cash-Out of Stock Options. Schedule 4.2 sets forth all individuals
holding outstanding exercisable options as of the Effective Date, including the
name of each such holder, the appropriate tax identification information of each
such holder, and the number of options held. Not later then five (5) business
days subsequent to the Effective Date, Union Bankshares shall provide to each
person listed on Schedule 4.2 a cash payment equal to the excess of (i) the
Merger Consideration per share of Mid-Coast Common Stock multiplied by the
number of shares of Mid-Coast Common Stock subject to the option(s) less (ii)
the aggregate exercise price for shares of Mid-Coast Common Stock subject to the
option(s), less any applicable taxes.
4.3 Dissenters' Rights. Any dissenting stockholder who shall be
entitled to be paid the "fair value" of his or her dissenters' shares, as
provided in Section 262 et seq. of the DGCL, shall not be entitled to the Merger
Consolidation, unless and until the holder thereof shall have failed to perfect
or shall have effectively withdrawn or lost such holder's right to dissent from
the Merger under Section 262 et seq. of the DGCL and shall be entitled to
receive only the payment to the extent provided for by Section 262 et seq. of
the DGCL with respect to such dissenters' shares. If any dissenting stockholder
shall fail to perfect or shall have efficiently withdrawn or lost the right to
dissent, the dissenters' shares held by such dissenting stockholder shall
thereupon be treated as though such dissenters' shares had been converted into
the right to receive the Merger Consolidation pursuant to Section 3.1.
ARTICLE 5
COVENANTS AND AGREEMENTS OF MID-COAST
5.1 Operation of Business. Between the date hereof and the Effective
Date, or until the termination of this Agreement, Mid-Coast covenants and agrees
that it will (i) operate its business solely in the ordinary course consistent
with past practices and in compliance with all applicable Laws; and, (ii) cause
Waldoboro to operate its business solely in the ordinary course consistent with
past practices and in compliance with all applicable Laws; (iii) use reasonable
best efforts to maintain and preserve intact its and Waldoboro's business
organization, employees and advantageous business relationships and retain the
services of its and Waldoboro's officers and key employees; (iv) take no action
which would materially adversely affect or materially delay the ability of
Mid-Coast or Waldoboro, respectively, to obtain any necessary approvals of any
Regulatory Authority required for the transactions contemplated hereby or to
perform its or Waldoboro's covenants and agreements under this Agreement, the
Subsidiary Merger Agreement or the Option Agreement, respectively; and (v)
Mid-Coast will not, and Mid-Coast will cause Waldoboro not to:
(a) Amend or otherwise change its Certificate of Incorporation,
charter or Bylaws (except to the extent required in order to effect the Merger
or Subsidiary Merger as contemplated herein), as each such document is in effect
on the date hereof;
(b) Issue or sell, or authorize for issuance or sale, any shares of
Mid-Coast Common Stock or the common stock, $1.00 par value, of Waldoboro or any
additional shares of
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any class of capital stock of Mid-Coast or Waldoboro (except to satisfy the
exercise of stock options or to the extent required to effect the Merger or
Subsidiary Merger as contemplated herein) or adjust, split, combine or
reclassify any shares of the capital stock of Mid-Coast or Waldoboro or issue
any other securities in respect of, in lieu of or in substitution for such
shares of capital stock;
(c) Issue, grant, or enter into any subscription, option, warrant,
right, convertible security, or other agreement or commitment of any character
obligating Mid-Coast or Waldoboro to issue securities;
(d) Declare, set aside, make, or pay any dividend or other
distribution with respect to its capital stock except (i) for each calendar
quarter in which the record date for dividends on Mid-Coast Common Stock
precedes the Effective Date, Mid-Coast may pay a regular semi-annual dividend in
the amount of $.10 per share, and (ii) dividends from Waldoboro to Mid-Coast to
the extent necessary to pay necessary and routine expenses of Mid-Coast
(including expenses relating to the transactions contemplated by this Agreement)
and to fund regular dividends by Mid-Coast to its stockholders to the extent
permitted by this paragraph;
(e) Redeem, purchase, or otherwise acquire, directly or indirectly,
any of its capital stock, respectively;
(f) Absent Union Bankshares' prior written consent, which will not
be unreasonably withheld, authorize any capital expenditure(s) which,
individually or in the aggregate, exceed $5,000.00;
(g) Except in the ordinary course of business, sell, pledge,
dispose of, or encumber, or agree to sell, pledge, dispose of, or encumber, any
assets of Mid-Coast or Waldoboro;
(h) Excluding normal and customary banking transactions, incur any
indebtedness for borrowed money, issue any debt securities, or enter into or
modify any contract, agreement, commitment, or arrangement with respect thereto
or assume, guarantee, endorse or otherwise as an accommodation become
responsible for the obligations of any other individual, corporation or other
entity, or make any loan or advance therefore;
(i) Impose or suffer the imposition, on any share of stock held by
Mid-Coast in Waldoboro, of any material lien, charge, or encumbrance, or permit
any such lien to exist;
(j) Establish or add any automated teller machines or branch or
other banking offices or enter into any new line of business or file any
application to relocate or terminate the operations of any banking office of
Mid-Coast or Waldoboro or, materially expand the business currently conducted by
Mid-Coast or Waldoboro;
(k) Acquire (by merger, consolidation, lease or other acquisition
of stock, ownership interests or assets) any corporation, partnership, or other
business organization or division thereof, or enter into any contract,
agreement, commitment, or arrangement with respect to any of the foregoing,
except to the extent required in order to effect the Merger as
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contemplated herein and except in the ordinary course of business in connection
with foreclosures or similar actions;
(l) Enter into, extend, or renew any lease for office or other
space;
(m) Except as required by law or permitted by this Agreement, enter
into, adopt or amend any bonus, profit sharing, compensation, stock option,
pension, retirement, deferred compensation, employment, or other employee
benefit plan, agreement, trust, fund, or arrangement for the benefit or welfare
of any officer, employee or Representative of Mid-Coast or Waldoboro, except
that Mid-Coast and Waldoboro may (i) offer, pay or grant any bonus or other
incentive to any specific employee or groups of employees as may be reasonably
required to keep such individuals under the employ of Mid-Coast or Waldoboro;
(ii) enter into a Termination Agreement with Wesley E. Richardson as set forth
in Exhibit C (the "Termination Agreement"); and (iii) terminate the
participation of Mid-Coast and Waldoboro in the defined benefit plan maintained
by Pentegra.
(n) Grant any increase in compensation to any director, officer, or
employee or Representative of Mid-Coast or Waldoboro except in the ordinary
course of business consistent with past practice and as set forth in Schedule
5.1;
(o) Absent Union Bankshares' prior written consent, which shall not
be unreasonably withheld, except as otherwise provided in this Agreement, enter
into, amend, or terminate any employment agreement, relationship or
responsibilities with any director, officer, or key employee or Representative
of Mid-Coast or Waldoboro, or enter into, amend, or terminate any employment
agreement with any other person otherwise than in the ordinary course of
business, or take any action with respect to the grant or payment of any
severance or termination pay;
(p) Take any action or omit to take any action which would cause
any of Mid-Coast's or Waldoboro's representations or warranties to be untrue or
misleading in any material respect or any covenant of Mid-Coast or Waldoboro
under this Agreement incapable of being performed;
(q) Take any action that would materially and adversely affect the
ability of any Party hereto to obtain the approvals necessary for consummation
of the transactions contemplated hereby or that would materially and adversely
affect Mid-Coast's or Waldoboro's ability to perform its covenants and
agreements hereunder;
(r) Take any action with respect to accounting methods, principles
or practices, other than changes required by applicable law or GAAP or
regulatory accounting as concurred in by Mid-Coast's independent accountants; or
make any Tax election or settle or compromise any federal, state, local or
foreign Tax liability;
(s) Change in any material respect its loan policies, except as
required by Regulatory Authorities; or
(t) Agree in writing or otherwise to do any of the foregoing.
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5.2 Insurance. Pending the Closing, Mid-Coast shall cause all of its
personal property and all real property owned or leased by Mid-Coast and
Waldoboro jointly or individually to be insured under policies with reasonable
deductibles and in full compliance with any coinsurance provision. Mid-Coast and
Waldoboro each shall also maintain all such insurance in place as of the date of
the signing of this Agreement with respect to its employees and with respect to
general liability. The insurance required under this Section 5.2 shall be in
addition to and not in lieu of the Environmental Insurance (as defined in
Section 8.3(g)).
5.3 Board Consent; Stockholders' Meeting.
(a) The Board of Directors of Mid-Coast shall adopt a resolution
recommending approval and adoption of this Agreement and the Subsidiary Merger
Agreement by Mid-Coast's stockholders, and, the Board of Directors of Mid-Coast
shall at all times recommend approval and adoption of this Agreement and the
Subsidiary Merger Agreement by Mid-Coast's stockholders. The Board of Directors
of Mid-Coast shall be permitted to withdraw or modify (or not to continue to
make) its recommendation to its stockholders if, but only if, (a) in the opinion
of the Mid-Coast's outside counsel, such action is required, in response to an
unsolicited bona fide written "Superior Proposal" (as defined herein), in order
for the Board of Directors of Mid-Coast not to breach its fiduciary duties under
applicable law, (b) Mid-Coast has given Union Bankshares five (5) business days'
prior notice of any meeting of the Board of Directors of Mid-Coast to consider
such Superior Proposal and the Mid-Coast Board of Directors has considered any
proposed changes to this Agreement (if any) proposed by Union Bankshares, and
(c) Mid-Coast has fully and completely complied with Section 5.6 hereof. For the
purposes of this Agreement, "Superior Proposal" shall mean any bona fide
Acquisition Proposal for at least a majority of the outstanding shares of
Mid-Coast Common Stock on terms the Board of Directors of Mid-Coast determines
in its good faith judgment (taking into account the advice of its financial
advisor, taking into account all the terms and conditions of the Acquisition
Proposal, including any break-up fees, option agreements, expense reimbursement
provisions and conditions to consummation) are in the aggregate more favorable
and provide greater value to all the Mid-Coast's stockholders than this
Agreement and the Merger taken as a whole. For purposes of this Agreement,
"Acquisition Proposal" means any offer or proposal for, or any indication of
interest in (w) a merger or consolidation, or any similar transaction, involving
Mid-Coast or Waldoboro, (x) a purchase, lease or other acquisition or assumption
of all or a substantial portion of the assets or deposits of Mid-Coast or all or
substantially all of the assets or deposits of Waldoboro, (y) a purchase or
other acquisition (including by way of merger, consolidation, share exchange or
otherwise) of beneficial ownership (the term "beneficial ownership" for purposes
of this Agreement having the meaning assigned thereto in Section 13(d) of the
1934 Act, and the rules and regulations thereunder) of securities representing
10% or more of the voting power of Mid-Coast or Waldoboro, or (z) any
substantially similar transaction.
(b) Mid-Coast will (i) take all steps necessary to call, give
notice of, convene and hold a special meeting of its stockholders no later than
July 15, 2000 for the purpose of approving this Agreement and the transactions
contemplated hereby and for such other purposes as may be necessary or
desirable, and (ii) cooperate and consult with Union Bankshares with respect to
each of the foregoing matters. Said notice shall include notice of dissenter's
rights, if any, and shall solicit stockholders' proxies in favor of this
Agreement, and all notices shall be given in accordance with all applicable
Laws. Except as may be required by fiduciary
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EXHIBIT 2.1
obligations, Mid-Coast and its directors will support and vote in favor of a
shareholder resolution approving this Agreement and the transaction contemplated
hereby including the Merger.
5.4 Mid-Coast and Waldoboro Financial and Other Reports. Mid-Coast
shall (and shall cause Waldoboro to) make available to Union Bankshares and
Union Trust the following statements and other reports and documents:
(a) Mid-Coast's Consolidated Balance Sheets as of December 31, 1999
and 1998 (unaudited) and March 31, 1999, 1998 and 1997 (audited); Consolidated
Statements of Income and Changes in Stockholders' Equity and Consolidated
Statements of Cash Flows for the years ended March 31, 1999, 1998 and 1997
(audited) and Statements of Income for the six-month periods ended December 31,
1999 and 1998 (unaudited) and all additional Consolidated Balance Sheets,
Consolidated Statements of Income and Changes in Stockholders' Equity,
Consolidated Statements of Cash Flows and Statements of Income prepared after
the date hereof but prior to the Effective Date ("Mid-Coast Financial
Statements"), and any related notes and reports of its independent public
accountants with respect thereto.
(b) The thrift financial reports, consolidated reports of
condition and income, and accompanying schedules, filed by Waldoboro with the
OTS for each calendar quarter, beginning January 1, 1995, through December 31,
1999.
(c) Such additional financial or other information as may be
required for the regulatory applications in connection with the consummation of
the Merger or the Subsidiary Merger (subject to any legal limitations).
5.5 Access to Properties and Records. Mid-Coast shall (and shall cause
Waldoboro to), upon reasonable notice, afford Union Bankshares and its officers,
employees, counsel, accountants, and other authorized Representatives access,
during normal business hours throughout the period prior to the Effective Date,
to all of its and Waldoboro's properties; books, contracts, commitments, loan
files, litigation files and records (including, but not limited to, the minutes
of the Boards of Directors of Mid-Coast and Waldoboro and all committees
thereof), and it shall (and shall cause Waldoboro to), upon reasonable notice
and to the extent consistent with applicable law, furnish promptly to Union
Bankshares such information as Union Bankshares may reasonably request to
perform such review. All information obtained hereunder shall be subject to the
confidentiality agreement heretofore executed.
5.6 No Solicitation. Prior to the Effective Date, neither Mid-Coast nor
Waldoboro shall authorize or knowingly permit any of their officers, directors,
employees, Representatives, agents or other Persons controlled by Mid-Coast or
Waldoboro to directly or indirectly, encourage or solicit or, hold any
discussions or negotiations with, or provide any information to, any Persons,
entity or group concerning any merger, consolidation, sale of substantial
assets, sale of shares of capital stock or similar transactions involving,
directly or indirectly, Mid-Coast or Waldoboro, except as contemplated by this
Agreement or as required to avoid any breach of any fiduciary obligations.
5.7 Covenant Not to Compete. Except as set forth on Schedule 5.7, in
addition to any restrictions which may be contained in any employment agreement
between Mid-Coast,
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Waldoboro and any director (other than Wesley E. Richardson who has entered into
a separate noncompetition agreement pursuant to Section 5.10 hereof), each of
the directors of Mid-Coast and Waldoboro agree that for the period from the date
hereof until two (2) years after the Effective Date, they will not become
directly, indirectly or beneficially an employee, five percent (5%) or more
shareholder, consultant to or director of any bank, savings bank, savings
association, trust company, financial institution or other similar business
enterprise which competes with Union Trust (as successor to Waldoboro) within
Waldo, Knox and Lincoln Counties, Maine. The directors of Mid-Coast and
Waldoboro further agree not to initiate any action to induce any employee of
Union Trust (as successor to Waldoboro) to leave Union Trust's employment or
directly or indirectly assist any other Person or entity in requesting or
inducing any such other employee of Union Trust to leave such employment for the
period of the date hereof until five (5) years after the Effective Date.
5.8 Termination of Employee Stock Options. Prior to the Effective Date,
Mid-Coast shall take all such action as is necessary to terminate the 1989 Stock
Option Plan (the "Stock Option Plans") as of the Effective Date, and shall
provide written notice to each holder of a then outstanding stock option to
purchase shares of Mid-Coast Common Stock pursuant to the Stock Option Plans
(whether or not such stock option is then vested or exercisable), that such
stock option shall be, as at the date of such notice, exercisable in full and
that such stock option shall terminate at the Effective Date, provided however
that each Option Holder shall be entitled to receive the cash payments described
in Section 4.2. Subject to the foregoing, the Stock Option Plan and all options
issued thereunder shall terminate not later than the Effective Date with no
Liability, monetary or otherwise, ensuing as a result thereof, other than the
obligation to provide cash payments as described in Section 4.2. Mid-Coast
hereby represents and warrants to Union Bankshares that the maximum number of
shares of Mid-Coast Common Stock subject to issuance pursuant to the exercise of
stock options issued and outstanding under the Stock Option Plan or otherwise is
not and shall not be at or prior to the Effective Date more than 5,583.
5.9 Employee Retention Plan. Prior to the Effective Date, Mid-Coast
shall take all action as is necessary to terminate the Recognition and Retention
Plan of Mid-Coast (the "Retention Plan") and the trust related thereto on or
prior to the Effective Date and shall provide written notice to each holder of
an outstanding stock award (whether or not such stock award is then vested),
that the Retention Plan shall be terminated on or prior to the Effective Date
and that all outstanding shares awarded thereunder shall become immediately and
fully vested in accordance with the terms of the Retention Plan. Subject to the
foregoing, the Retention Plan shall terminate not later than the Effective Date,
with no Liability, monetary or otherwise, ensuing as a result thereof other than
the payment of the Merger Consideration to each holder of a stock award in
accordance with Section 4.1 hereof. Mid-Coast hereby represents and warrants to
Union Bankshares that the maximum number of shares of Mid-Coast Common Stock
subject to vesting pursuant to the Retention Plan, or subject to distribution by
the Trustee under the Retention Plan, is not and shall not be at or prior to the
Effective Date more than 11,718.
5.10 Termination of Richardson Employment Agreement. Prior to the
Effective Date, Mid-Coast shall take all such action as is necessary to
terminate the Amended and Restated Employment Agreement of Wesley E. Richardson
dated May 18, 1993 (the "Employment Agreement") as of the Effective Date, such
termination to be effective as of the Effective Date. In connection therewith,
Mid-Coast shall enter into the Termination Agreement. Union
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Bankshares shall, within five days following the Effective Date, pay all amounts
due under Sections 2(a) and 2(c) of the Termination Agreement.
5.11 Environmental Reports. Prior to the Effective Date, Mid-Coast
shall take all such action as is necessary to obtain a Phase I environmental
site assessment, conducted in accordance with current ASTM standards and
applicable Maine statutes and regulations governing environmental issues, with
respect to each of its or Waldoboro's operating locations including the
Waldoboro main branch location and use its best efforts to obtain such Phase I
assessments with respect to such other locations which Mid-Coast or Waldoboro
may use for operations under lease, and shall deliver all such reports,
assessments and analyses to Union Bankshares prior to the Effective Date. Union
Bankshares shall reimburse Mid-Coast for one-half of the costs of obtaining all
such environmental reports; provided that Union Bankshares shall select the firm
or organization that will prepare the site assessment; and provided further that
nothing in this Section 5.11 shall be construed to create any liability
whatsoever on the part of Union Bankshares with respect to any environmental
liabilities discovered or caused as a result of Mid-Coast obtaining such
reports.
5.12 Quality Control Program. Prior to the Effective Date, Mid-Coast
shall continue to enforce its quality control program for Waldoboro with respect
to Waldoboro's FHLMC loans and Maine state housing loans in accordance with the
rules, policies and regulations of such agencies with respect to such loan
programs and Mid-Coast shall cooperate fully with Union Bankshares and take all
actions necessary and desirable, as reasonably requested by Union Bankshares, to
allow Union Bankshares to review and monitor the quality control program prior
to the Effective Date.
5.13 Loan Documentation. Prior to the Effective Date, Mid-Coast shall
cooperate fully with Union Bankshares and take all actions necessary and
desirable, as reasonably requested by Union Bankshares, to review and update
documentation with respect to Waldoboro's completed and pending commercial and
consumer lending transactions.
5.14 No Further Remediation Action. Neither Mid-Coast nor Waldoboro
shall have received any modification or revocation from any Governmental
Authority of that certain letter (the "DEP Letter") dated March 23, 2000 from
the Maine Department of Environmental Protection to Mid-Coast with respect to
DEP Spill #A-146-85 and matters related thereto concerning Mid-Coast's Rockland
property.
5.15 Verification of Excavation and Disposal. Within thirty days of the
date hereof, Mid-Coast shall use its best efforts to deliver to Union Bankshares
documentation evidencing the lawful disposal of all of the oil-contaminated
materials excavated at Mid-Coast's Rockland property prior to and in connection
with the construction of the bank facility located thereon, provided however,
that in the event that such documentation cannot be provided for reasons beyond
the control of Mid-Coast, Mid-Coast shall deliver to Union Bankshares within
forty-five days of the date hereof documents evidencing that (i) Mid-Coast was
not the equitable or title owner of the Rockland property at the time such
excavation and disposal was undertaken and (ii) Mid-Coast did not participate
and was not associated, in any fashion, with such excavation and disposal
activities. All such documentation shall be to the sole satisfaction of Union
Bankshares. In the event that such documentation is not provided timely, or
documentation provided is not
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satisfactory to Union Bankshares in its sole discretion, then Mid-Coast shall
seek to increase the Environment Insurance to provide coverage with respect to
the Liabilities associated with any improper or unlawful excavation or disposal
of the oil-contaminated soil from the Rockland property. Any costs associated
with an increase to the Environmental Insurance shall be borne solely by
Mid-Coast.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF MID-COAST
For purposes of this Agreement, except where the context requires
otherwise, any reference to Mid-Coast in this Article 6 shall be deemed to
include each of Mid-Coast and Waldoboro (including any Subsidiary of Waldoboro)
and any reference to "material," Material Adverse Effect or a similar standard
shall refer to the financial condition, operations or other aspects of Mid-Coast
and Waldoboro taken as a whole. Mid-Coast hereby represents and warrants to
Union Bankshares as follows:
6.1 Organization and Authority. Mid-Coast is a savings association
holding company registered with the OTS under the Savings and Loan Holding
Company Act and is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware. Waldoboro is a federally
chartered savings bank duly organized, validly existing and in good standing
under the Laws of the United States. Each of Mid-Coast and Waldoboro is duly
licensed or qualified to do business and is in corporate good standing in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and Assets owned, leased or operated by
it makes such licensing or qualification necessary, except where the failure to
be so licensed or qualified and in corporate good standing would not,
individually or in the aggregate, result in any Material Adverse Effect. Each of
Mid-Coast and Waldoboro has the requisite corporate power and authority to own,
lease and operate its properties and Assets and to carry on its business as it
is now being conducted. The Certificate of Incorporation, Charter and Bylaws of
each of Mid-Coast and Waldoboro, copies of which have previously been made
available to Union Bankshares, are true, correct and complete copies of such
documents in effect as of the date of this Agreement. Neither Mid-Coast nor
Waldoboro is as of the date of this Agreement or will be as of the Effective
Date in violation of any provision of its Certificate of Incorporation, Charter
or its Bylaws. The minute books of each of Mid-Coast and Waldoboro contain in
all material respects true and complete records of all meetings held and
corporate actions taken since January 1, 1997 of their respective stockholders
and boards of directors (including committees of their respective boards of
directors).
6.2 Authorization.
(a) Authority of Mid-Coast. Mid-Coast has all requisite corporate
power and authority to execute and deliver this Agreement and the other
Transaction Documents and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement and the
Transaction Documents by Mid-Coast and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the Board of
Directors of Mid-Coast, subject to regulatory and stockholder approval. No other
corporate proceedings on the part of Mid-Coast are necessary to authorize
consummation
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of this Agreement, except for the approval of the transaction by Mid-Coast's
stockholders, and the performance by Mid-Coast of the terms hereof. This
Agreement and each of the Transaction Documents is a valid and binding
obligation of Mid-Coast enforceable against Mid-Coast in accordance with its
terms except as may be limited by applicable bankruptcy, insolvency,
reorganization or moratorium or other similar Laws affecting creditors' rights
generally and except that the availability of equitable remedies is within the
discretion of the appropriate court and except that it is subject to approval by
its stockholders and applicable Regulatory Agencies.
(b) Authority of Waldoboro. Waldoboro has full corporate power and
authority to execute and deliver the Subsidiary Merger Agreement, to perform its
obligations thereunder and to consummate the transactions contemplated thereby.
The execution and delivery of the Subsidiary Merger Agreement, the performance
of its obligations thereunder and the consummation of the transactions
contemplated thereby have been duly and validly approved by the unanimous action
of the Board of Directors of Waldoboro. Except for adoption of the Subsidiary
Merger Agreement by Waldoboro's stockholders, no other corporate action and no
other corporate proceedings on the part of Waldoboro are necessary to authorize
the Subsidiary Merger Agreement or the performance of Waldoboro's obligations
thereunder or to consummate the transactions contemplated thereby. The
Subsidiary Merger Agreement, upon execution and delivery by Waldoboro, will be
duly and validly executed and delivered by Waldoboro and will constitute a
legal, valid and binding obligation of Waldoboro, enforceable against Waldoboro
in accordance with its terms.
(c) No Violation. Neither the execution, delivery or performance of
this Agreement or the other Transaction Documents by Mid-Coast, nor the
consummation of the transactions contemplated hereby or thereby, nor the
execution, delivery or performance of the Subsidiary Merger Agreement by
Waldoboro, nor the consummation by Waldoboro of the transactions contemplated
hereby or thereby, nor compliance by Mid-Coast or Waldoboro with any of the
provisions hereof or thereof, will (i) in any material respect violate, conflict
with, or result in a breach of any provision of, or constitute a Default (or an
event which, with notice or lapse of time or both, would constitute a Default)
under or result in the termination of, or accelerate the performance required
by, or result in a right of termination or acceleration, or the creation of any
Lien, security interest, charge or encumbrance upon any of the properties or
Assets of Mid-Coast or Waldoboro under any terms, conditions or provisions of
(A) Mid-Coast's or Waldoboro's Certificate of Incorporation, Charter or Bylaws,
or (B) except as set forth on Schedule 6.2, any material note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which Mid-Coast or Waldoboro is a party or by which Mid-Coast or
Waldoboro may be bound, or to which Mid-Coast or Waldoboro or the properties or
Assets of it may be subject, or (ii) violate in any material respect any Order
applicable to Mid-Coast or Waldoboro or any of its properties or Assets.
6.3 Capital Structure.
(a) Mid-Coast. As of the date hereof, the authorized capital of
Mid-Coast consists solely of 1,500,000 shares of Mid-Coast Common Stock and
500,000 shares of preferred stock, $1.00 par value. As of the date hereof,
753,570 shares of such authorized Common Stock were issued and outstanding and
no shares of such authorized preferred stock were issued and outstanding. The
outstanding shares of capital stock of Mid-Coast are validly issued and
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outstanding, fully paid and nonassessable. Except as set forth on Schedule 6.3,
there are no outstanding options, conversion rights, warrants, calls, rights,
commitments or agreements to issue any form of stock or other security of
Mid-Coast or sell any form of common stock or other security of Mid-Coast or
Waldoboro. There are no outstanding obligations or commitments to purchase,
redeem or otherwise acquire any outstanding shares of Mid-Coast Common Stock.
(b) Waldoboro. As of the date hereof, the authorized capital of
Waldoboro consists solely of 7,500,000 shares of common stock and 2,500,000
shares of preferred stock. As of the date hereof, 203,174 shares of such
authorized common stock were issued and outstanding and no shares of such
authorized preferred stock were issued and outstanding. The outstanding shares
of capital stock of Waldoboro are validly issued and outstanding, fully paid and
nonassessable. There are no outstanding options, conversion rights, warrants,
calls, rights, commitments or agreements to issue any form of stock or other
security of Waldoboro or sell any form of common stock or other security of
Waldoboro. There are no outstanding obligations or commitments to purchase,
redeem or otherwise acquire any outstanding shares of Waldoboro Common Stock.
6.4 Subsidiaries.
(a) Waldoboro. Except as set forth on Schedule 6.4, Mid-Coast does
not own, directly or indirectly, five percent (5%) or more of the outstanding
capital stock or other voting securities of any corporation, bank, or other
organization. Schedule 6.4 sets forth as of the date of this Agreement the
percentage and type of equity securities issued and outstanding by Waldoboro and
owned or controlled by Mid-Coast. Waldoboro's deposits are insured by the
Savings Association Insurance Fund of the FDIC in accordance with the FDIA to
the fullest extent permitted by Law, and had paid all premiums and assessments
and filed all reports required by the FDIA. As of the date hereof, no
proceedings for the revocation or termination of such deposit insurance are
pending or to the Knowledge of Mid-Coast or Waldoboro, threatened. Waldoboro is
"adequately capitalized" as such term is defined in the rules and regulations
promulgated by the OTS and the FDIC.
(b) First Waldoboro. Waldoboro does not own, directly or
indirectly, five percent (5%) or more of the outstanding capital stock or other
voting securities of any corporation, bank, or other organization except First
Waldoboro Corporation ("First Waldoboro"). Schedule 6.4 sets forth as of the
date of this Agreement the percentage and type of equity securities of First
Waldoboro issued and outstanding and owned or controlled by Waldoboro and the
jurisdiction of First Waldoboro's incorporation. Except as set forth on Schedule
6.4, First Waldoboro does not hold title to any Assets, is not a party to any
Contracts, and conducts no significant business activity. There are no
outstanding options, conversion rights, warrants, calls, rights, commitments or
agreements to issue any form of stock or other security of First Waldoboro.
There are no outstanding obligations or commitments to purchase, redeem or
otherwise acquire any outstanding shares of First Waldoboro's securities. The
outstanding shares of common stock of First Waldoboro are validly issued and
outstanding, fully paid and nonassessable and all of such shares are owned by
Waldoboro, free and clear of all Liens, claims and encumbrances.
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6.5 Mid-Coast Financial Statements. Mid-Coast and Waldoboro have made
available to Union Bankshares true and correct copies of the Mid-Coast Financial
Statements (defined in Section 5.4). The Mid-Coast Financial Statements (i) have
been prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied, and (ii) present fairly the consolidated results
of operations of Mid-Coast and Waldoboro for the periods covered thereby and the
consolidated financial condition of Mid-Coast and Waldoboro as of the dates
thereof.
6.6 No Material Adverse Change. Since March 31, 1999, there has been no
event or condition of any character (whether actual, or to the Knowledge of
Mid-Coast or Waldoboro, threatened or contemplated) that has had or can
reasonably be anticipated to have, a Material Adverse Effect on Mid-Coast or
Waldoboro.
6.7 Tax Liability. The amounts set up as Liabilities for Taxes in the
Mid-Coast Financial Statements are sufficient for the payment of all respective
Taxes accrued in accordance with GAAP and unpaid at the respective dates
thereof.
6.8 Tax Returns; Payment of Taxes. All federal, state, local, and
foreign Tax Returns (including, without limitation, estimated Tax Returns,
withholding Tax Returns with respect to employees, and FICA and FUTA returns)
required to be filed by or on behalf of Mid-Coast or Waldoboro have been timely
filed or requests for extensions have been timely filed and granted and have not
expired for periods ending on or before December 31, 1999, and all returns filed
are complete and accurate to the Knowledge of its management and all Taxes shown
on filed returns have been paid. As of the date hereof, there is no audit,
examination, deficiency or refund Litigation or matter in controversy with
respect to any Taxes that might result in a determination materially adverse to
Mid-Coast or Waldoboro, except as reserved against in the Mid-Coast Financial
Statements. All Taxes, interest, additions and penalties due with respect to
completed and settled examinations or concluded Litigation have been paid, and
Mid-Coast's and Waldoboro's reserves for bad debts at March 31, 1999, as filed
with the Internal Revenue Service were not greater than the maximum amounts
permitted under the provisions of Section 585 of the Code.
6.9 Litigation and Proceedings. Except as set forth on Schedule 6.9
hereto, no Litigation, proceeding or controversy before any court or
governmental agency is pending against Mid-Coast or Waldoboro that in the
opinion of its management is likely to have a Material Adverse Effect on
Mid-Coast or Waldoboro, and, to the Knowledge of the management of Mid-Coast or
Waldoboro, no such Litigation, proceeding or controversy has been threatened or
is contemplated.
6.10 Professional Fees. Except for Trident Securities, a division of
McDonald Investments, Inc., neither Mid-Coast or Waldoboro, nor any of their
respective officers, directors, employees, or Affiliates has employed any broker
or finder or incurred any Liability for any financial advisory fees, investment
bankers' fees, brokerage fees, commissions, or finders' fees in connection with
this Agreement or the transactions contemplated hereby.
6.11 Contingent Liabilities. Except as disclosed on Schedule 6.11
hereto or as reflected in the Mid-Coast Financial Statements, and except in the
case of Waldoboro for
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unfunded loan commitments made in the ordinary course of business consistent
with past practices, as of December 31, 1999, neither Mid-Coast nor Waldoboro
has any obligation or Liability (contingent or otherwise) that was material, or
that when combined with all similar obligations or liabilities would have been
material, to Mid-Coast and Waldoboro taken as a whole and there does not exist a
set of circumstances that, to the Knowledge of Mid-Coast, could reasonably be
expected to result in any such material obligation or Liability.
6.12 Title to Assets; Insurance. Schedule 6.12 sets forth all real
property and material properties and Assets owned or leased by Mid-Coast or
Waldoboro, including property on or at which is situated or located any
automatic teller machine (ATM) owned, leased, licensed or controlled by
Mid-Coast or Waldoboro.
Except as described on Schedule 6.12:
(a) As of December 31, 1999, each of Mid-Coast and Waldoboro had,
and except with respect to Assets disposed of for adequate consideration in the
ordinary course of business consistent with past practices since such date, now
has, good and merchantable title to all real property and good and merchantable
title to all other material properties and Assets reflected in the Mid-Coast
Financial Statements, free and clear of all mortgages, Liens, pledges,
restrictions, security interests, charges and encumbrances of any nature except
for (i) mortgages and encumbrances which secure indebtedness which is properly
reflected in the Mid-Coast Financial Statements or which secure deposits of
public funds as required by Law; (ii) Liens for Taxes accrued but not yet
payable; (iii) Liens arising as a matter of Law in the ordinary course of
business consistent with past practices with respect to obligations incurred
after December 31, 1999, provided that the obligations secured by such Liens are
not delinquent or are being contested in good faith; (iv) such imperfections of
title and encumbrances, if any, as do not materially detract from the value or
materially interfere with the present use of any of such properties or Assets or
the potential sale of any such owned properties or Assets; and (v) capital
leases and leases, if any, to third parties for fair and adequate consideration.
Each of Mid-Coast and Waldoboro owns, or has valid leasehold interests in, all
material properties and Assets, tangible or intangible, used in the conduct of
its business. Any real property and other material Assets held under Contract by
Mid-Coast or Waldoboro are held under valid, subsisting and enforceable
Contracts with such exceptions that do not have a Material Adverse Effect and do
not interfere with the use made or proposed to be made by Union Bankshares in
such Contract of such property. Except as disclosed on Schedule 6.12 with
respect to each Contract for any real property or a material amount of personal
property to which Mid-Coast or Waldoboro is a party and except for financing
leases in which Mid-Coast is lessor, (i) such Contract is in full force and
effect in accordance with its terms; (ii) all rents and other monetary amounts
that have been due and payable thereunder have been paid; (iii) there exists no
Default or event, occurrence, condition or act which with the giving of notice,
the lapse of time or the happening of any further event, occurrence, condition
or act would become a Default under such Contract; (iv) the Merger will not
constitute a Default or a cause for termination or modification of such
Contract; and (v) no Consent must be obtained from any third party, including
any party to such Contract, for the valid transfer of such Contract to Union
Bankshares pursuant to the Merger.
(b) Neither Mid-Coast nor Waldoboro has any legal obligation,
absolute or contingent, to any other Person to sell or otherwise dispose of any
substantial part of its Assets or
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to sell or dispose of any of its Assets except in the ordinary course of
business consistent with past practices.
(c) To the Knowledge and belief of Mid-Coast, the policies of fire,
theft, liability and other insurance maintained with respect to the Assets or
business of Mid-Coast and Waldoboro provide adequate coverage against such risks
as companies engaged in a similar business would in accordance with good
business practice insure against and are insured in such amounts with such
deductibles and against such risks and losses as are in the opinion of
management adequate for the business engaged in by each of Mid-Coast and
Waldoboro. Schedule 6.12 sets forth a summary of all material policies of
insurance of Mid-Coast and Waldoboro currently in effect, which summary is
accurate and complete in all material respects. All of the policies relating to
insurance maintained by Mid-Coast and Waldoboro with respect to its material
properties and the conduct of its business in any material respect (or any
comparable policies entered into as a replacement therefore) are in full force
and effect and neither Mid-Coast nor Waldoboro has received any notice of
cancellation with respect thereto.
6.13 Liabilities. To the Knowledge of Mid-Coast, all Liabilities of
Mid-Coast and Waldoboro were, and will be created, for good, valuable and
adequate consideration in accordance with prudent business standards and in
compliance with all Laws and the accounts or evidence of ownership of accounts
are and will be genuine, true, valid and enforceable in accordance with their
written terms. Neither Mid-Coast nor Waldoboro has agreed to any modification or
extension of accounts or account terms or otherwise made any agreements
regarding such accounts except as disclosed in writing on the books and records
of Mid-Coast and Waldoboro; neither Mid-Coast nor Waldoboro has Knowledge of any
claim of ownership to any account other than as shown on the written ownership
records of Mid-Coast and Waldoboro for each account; and neither Mid-Coast nor
Waldoboro has Knowledge of any alleged improper or wrongful withdrawal or
payment of any such account.
6.14 Loans. To the Knowledge of Mid-Coast each loan reflected as an
asset of Mid-Coast or Waldoboro in the Mid-Coast Financial Statements, as of
December 31, 1999, or acquired since that date, was issued or originated and is
in compliance with all applicable loan policies of Mid-Coast and Waldoboro
(except where such non-compliance would not have a Material Adverse Effect), and
is the legal, valid, and binding obligation of the obligor named therein,
enforceable in accordance with its terms, and no loan is subject to any asserted
defense, offset or counterclaim known to Mid-Coast or Waldoboro, except as
disclosed in writing to Union Bankshares on or prior to the date hereof. The
information (including electronic information and information contained on tapes
and computer disks) with respect to all loans held by Mid-Coast and Waldoboro
furnished to Union Bankshares is true and complete in all material respects.
6.15 Allowance for Loan Losses. To the knowledge of Mid-Coast, and
except as set forth on Schedule 6.15 hereto, the allowance for loan losses shown
on the consolidated balance sheet of Mid-Coast as of December 31, 1999 is
adequate in all material respects under the requirements of GAAP to provide for
reasonably anticipated losses on outstanding loans, net of recoveries.
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6.16 Investment Securities. Except as disclosed on Schedule 6.16 and
except for pledges to secure public and trust deposits, FHLB borrowings,
repurchase agreements and reverse repurchase agreements entered into in arms'
length transactions pursuant to normal commercial terms and conditions and other
pledges required by Law, none of the investments reflected in the Mid-Coast
Financial Statements for the period ended March 31, 1999, and none of the
material investments made by Mid-Coast or Waldoboro since March 31, 1999, is
subject to any restriction (contractual, statutory or otherwise) that would
materially impair Mid-Coast's or Waldoboro's ability freely to dispose of such
investment at any time.
6.17 Information for Proxy Statement; Regulatory Filings. None of the
information supplied or to be supplied by Mid-Coast or Waldoboro with respect to
each of Mid-Coast and Waldoboro for inclusion in (a) the Notice of Meeting and
Joint Proxy Statement to be mailed by Mid-Coast to its stockholders in
connection with the meeting referred to in Section 5.3 hereof (the "Joint Proxy
Statement") and (b) any other documents to be filed with any Regulatory
Authority in connection with the transactions contemplated hereby will at the
time the Proxy Statement is mailed to holders of Mid-Coast's Common Stock, as
may be amended at the time of Mid-Coast Stockholders' Meeting, and at the time
of filing of such other documents, respectively, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. All documents, financial statements, or
other information or materials which Mid-Coast or Waldoboro shall provide for
filing with any Regulatory Authority in connection with the Merger and the
Subsidiary Merger will, to the extent applicable, comply with GAAP.
6.18 Commitments and Contracts. Neither Mid-Coast nor Waldoboro is a
party or subject to any of the following (whether written or oral, express or
implied):
(a) Except as listed on Schedule 6.18(a) attached hereto and with a
complete copy provided to Union Bankshares, any Contract (including any
obligations with respect to severance or termination pay liabilities or fringe
benefits) with any present or former officer, director, employee or consultant
(other than those which are terminable at will by Mid-Coast or Waldoboro) or any
agreement with any labor union;
(b) Except as listed on Schedule 6.18(b) attached hereto, with a
complete copy provided to Union Bankshares, any Contract providing for any
bonus, pension, option, deferred compensation, retirement payment, profit
sharing or similar arrangement with respect to any present or former officer,
director, employee or consultant; or
(c) Except as listed on Schedule 6.18(c) attached hereto, any
Contract containing covenants which limit the ability of Mid-Coast or Waldoboro
to compete in any line of business or with any Person or which involves any
restriction of the geographical area in which, or method by which, Mid-Coast or
Waldoboro may carry on its business (other than as may be required by Law or
applicable Regulatory Authority).
(d) Except as listed on Schedule 6.18(d) attached hereto, any
Contract, or any other commitment, understanding, term, obligation or
arrangement, whether absolute or contingent, with respect to any sale, tender,
merger, consolidation, reorganization or similar
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arrangement between Mid-Coast or Waldoboro and any third party other than Union
Bankshares or Union Trust, with respect to the Assets or capital stock of either
Waldoboro or Mid-Coast.
6.19 Employees.
(a) Schedule 6.19(a) sets forth a true and complete list of each
material employee benefit or compensation plan, arrangement or agreement and any
material bonus, incentive, deferred compensation, vacation, stock purchase,
stock option, severance, employment, change of control or fringe benefit plan,
program or agreement that is maintained, or contributed to, as of the date of
this Agreement (the "Benefit Plans") by each of Mid-Coast and Waldoboro.
(b) Mid-Coast and Waldoboro have heretofore made available to Union
Bankshares true and complete copies of each of the Benefit Plans and certain
related documents, including, but not limited to (i) the actuarial report for
such Benefit Plan (if applicable) for 1999; and (ii) the most recent
determination letter from the IRS (if applicable) for such Benefit Plan.
(c) (i) Each of the Benefit Plans has been operated and
administered in all material respects in compliance with applicable Laws,
including, but not limited to, ERISA and the Internal Revenue Code of 1986, as
amended (the "Code"); (ii) to the knowledge of Mid-Coast each of the Benefit
Plans intended to be "qualified" within the meaning of Section 401 (a) of the
Code has been operated in all material respects within the requirements of
Section 401(a) of the Code, and there are no existing circumstances or any
events that have occurred that will adversely affect the qualified status of any
such Benefit Plan; (iii) with respect to each Benefit Plan which is subject to
Title IV of ERISA, the present value of accrued benefits under such Benefit
Plan, based upon the actuarial assumptions used for funding purposes in the most
recent actuarial report prepared by such Benefit Plan's actuary with respect to
such Benefit Plan, did not, as of its latest valuation date, exceed the then
current value of the Assets of such Benefit Plan allocable to such accrued
benefits; (iv) no Benefit Plan provides benefits, including, without limitation,
death or medical benefits (whether or not insured), with respect to current or
former employees or directors of Mid-Coast or Waldoboro beyond their retirement
or other termination of service, other than (A) coverage mandated by applicable
Law; (B) death benefits or retirement benefits under any "employee pension plan"
(as such term is defined in Section 3(2) of ERISA); (C) deferred compensation
benefits accrued as liabilities on the consolidated books of Mid-Coast; or (D)
benefits the full cost of which is borne by the current or former employee or
director (or his or her beneficiary); (v) no Liability under Title IV of ERISA
has been incurred by Mid-Coast or Waldoboro that has not been satisfied in full,
and no condition exists that presents a risk to Mid-Coast or Waldoboro, of
incurring a material Liability thereunder; (vi) no Benefit Plan is a
"multiemployer pension plan" (as such term is defined in Section 3(37) of
ERISA); (vii) all contributions or other amounts payable by Mid-Coast or
Waldoboro as of the Effective Date with respect to each Benefit Plan in respect
of current or prior plan years have been paid or accrued in accordance with GAAP
and Section 412 of the Code; (viii) to the Knowledge of Mid-Coast, neither
Mid-Coast, Waldoboro nor any other Person, including any fiduciary, has engaged
in a transaction in connection with which Mid-Coast, Waldoboro or any Benefit
Plan will be subject to either a material civil penalty assessed pursuant to
Section 409 or 502(i) of ERISA or a material Tax imposed pursuant to Section
4975 or 4976 of the Code; and (ix) to the Knowledge of the management of each of
Mid-Coast and Waldoboro there are no
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pending, threatened or anticipated claims (other than routine claims for
benefits) by, on behalf of or against any of the Benefit Plans or any trusts
related thereto which will have, either individually or in the aggregate, a
Material Adverse Effect on Mid-Coast or Waldoboro.
(d) Except with respect to the Termination Agreement, the Stock
Option Plan and the Retention Plan, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
(either alone or in conjunction with any other event) (i) result in any payment
(including, without limitation, severance, unemployment compensation, "excess
parachute payment" (within the meaning of Section 280G of the Code), forgiveness
of indebtedness or otherwise) becoming due to any director or any employee of
Mid-Coast or Waldoboro under any Benefit Plan or otherwise; (ii) increase any
benefits otherwise payable under any Benefit Plan; or (iii) result in any
acceleration of the time of payment or vesting of any such benefits.
(e) Neither Mid-Coast nor Waldoboro maintain or have taken any
action to obtain life insurance policies on the lives of any of the current and
former officers and directors of Mid-Coast or Waldoboro.
(f) Each Welfare Plan (as defined in Section 3(1) of ERISA) has
been operated in all material respects in accordance with its terms and in
compliance in all material respects with the applicable provisions of ERISA, the
Code and all other applicable laws, including, without limitation, the Health
Insurance Portability and Accountability Act of 1996 ("HIPAA") and the
Consolidated Omnibus Budget Reconciliation Act of 1984 ("COBRA"). No insurance
contract or policy requires or permits any retroactive increase in premiums or
payments due thereunder. Neither Mid-Coast nor Waldoboro has established or
contributed to, is required to contribute to or has or could have any liability
of any nature, whether known or unknown, direct or indirect, fixed or
contingent, with respect to any "voluntary employees' beneficiary association"
within the meaning of Section 501(c)(9) of the Code, "welfare benefit fund"
within the meaning of Section 419 of the Code, "qualified asset account" within
the meaning of Section 419A of the Code or "multiple employer welfare
arrangement" within the meaning of Section 3(40) or ERISA.
(g) There are no facts or circumstances which could, directly or
indirectly, subject Mid-Coast or Waldoboro or to any (1) excise tax or other
liability under Chapters 43, 46 or 47 of Subtitle D of the Code, (2) penalty tax
or other liability under Chapter 68 of Subtitle F of the Code or (3) civil
penalty, damages or other liability arising under Section 502 of ERISA.
(h) Full payment has been made of all amounts which Mid-Coast or
Waldoboro is required, under applicable law, the terms of any pension plan,
welfare plan or other compensation plan, or any agreement relating to any
pension plan, welfare plan or other compensation plan, to have paid as a
contribution, premium or other remittance thereto or benefit thereunder. There
will be no change on or before the Effective Date in the operation of any
pension plan, welfare plan, or other compensation plan or any documents with
respect thereto which will result in an increase in the benefit liabilities
under such plans, except as may be required by law.
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(i) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will constitute (i) a
termination of employment or other event entitling any person to any additional
or other benefits, or that would otherwise modify any benefits or the vesting,
funding or payment of any benefits, under any such plan other than the Stock
Option Plan and the Retention Plan or (ii) a violation of Section 406 of ERISA
or a prohibited transaction for which there exists neither a statutory nor
regulatory exemption or for which an exemption has not been obtained.
(j) No action or omission of Mid-Coast or Waldoboro or any
shareholder, director, employee, or agent thereof in any way restricts, impairs
or prohibits Union Bankshares or any successor from amending, merging, or
terminating any pension plan, welfare plan or other compensation plan in
accordance with the express terms of any such plan and applicable law.
(k) Except as provided in Section 5.1(m) neither Mid-Coast nor
Waldoboro shall adopt or amend in any material respect any employee pension,
profit-sharing, retirement, bonus, deferred compensation, insurance, incentive
compensation, severance, thrift, vacation or other plan, agreement, trust fund
or arrangement for the benefit of its employees (whether or not legally binding)
other than amendments to existing benefit plans necessary to conform to legal
requirements (after providing copies thereof to the Union Bankshares).
(l) No "reportable event", within the meaning of section 4043 of
ERISA, has occurred with respect to any pension plan subject to Title IV of
ERISA.
6.20 Vote Required. The affirmative vote of the holders of at least a
majority of the outstanding shares of Mid-Coast Common Stock is the only vote of
the stockholders of Mid-Coast necessary to approve the Merger (with respect to
Mid-Coast) and related transactions contemplated hereby. The affirmative vote of
at least a majority of the outstanding shares of capital stock of Waldoboro is
the only vote of the stockholders of Waldoboro necessary to approve the
Subsidiary Merger and related transactions contemplated thereby.
6.21 Environmental Matters. Except as set forth on Schedule 6.21,
neither Mid-Coast nor Waldoboro, nor to the Knowledge of the management of each
of Mid-Coast and Waldoboro, any previous or current owner or operator of any
properties at any time owned (including any properties owned or subsequently
resold), leased, or occupied by Mid-Coast or Waldoboro or used by Mid-Coast or
Waldoboro in its respective business ("Mid-Coast Properties") used, generated,
treated, stored, or disposed of any Hazardous Materials on, under, or about
Mid-Coast Properties except in compliance with all applicable federal, state,
and local Laws pertaining to air and water quality, environmental contamination
Hazardous Materials, waste disposal, air emissions, health and safety and other
environmental matters including but not limited to Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Sections 9601-9675 and the Resource Conservation and Recovery Act ("RCRA"),
42 U.S.C. Sections 6901-6992k, each as amended, ("Environmental Laws").
Mid-Coast has not received any notice of noncompliance with Environmental Laws,
applicable Laws, Orders, or regulations of any governmental authorities relating
to any environmental condition generated by any such party or otherwise or
notice that any such party is liable or responsible for the remediation,
removal, or cleanup of any of the Mid-Coast Properties. Except as set forth on
Schedule 6.21, neither Mid-Coast nor Waldoboro has Knowledge of any
contamination by Hazardous Materials
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on any Mid-Coast Properties. There are no legal, administrative, arbitral or
other proceedings, claims, actions, causes of action, private environmental
investigations or remediation activities or governmental investigations of any
nature seeking to impose, or that could reasonably result in the imposition, on
Mid-Coast or Waldoboro of any Liability or obligation arising under any
Environmental Laws, pending or threatened to the Knowledge of Mid-Coast or
Waldoboro against Mid-Coast or Waldoboro, which Liability or obligation would,
either individually or in the aggregate, have a Material Adverse Effect on
either Mid-Coast or Waldoboro. Neither Mid-Coast nor Waldoboro is subject to any
agreement, order, judgment, decree, letter or memorandum by or with any court,
Governmental Authority, regulatory agency or third party imposing any Liability
or obligation with respect to the foregoing that will have, either individually
or in the aggregate, a Material Adverse Effect on either Mid-Coast or Waldoboro.
6.22 Labor. No work stoppage involving Mid-Coast or Waldoboro employees
is pending or, to the Knowledge Mid-Coast's or Waldoboro's management,
threatened. Neither Mid-Coast nor Waldoboro is involved in, or, to the Knowledge
of Mid-Coast's or Waldoboro's management, threatened with or affected by, any
dispute, arbitration, lawsuit or administrative proceeding relating to labor or
employment matters which might reasonably be expected to interfere in any
material respect with the business activities of Mid-Coast or Waldoboro. No
employees of Mid-Coast or Waldoboro are represented by any labor union, and, to
the Knowledge of each of Mid-Coast's and Waldoboro's management, no labor union
is attempting to organize employees of Mid-Coast.
6.23 Accuracy of Information. To the Knowledge of each of Mid-Coast's
and Waldoboro's officers and directors, none of the information supplied or to
be supplied by each of Mid-Coast and Waldoboro to Union Bankshares and Union
Trust with respect to the Assets and Liabilities of Mid-Coast and Waldoboro, and
this Agreement, contains any untrue statement of a material fact or omit to
state a material fact required to be stated therein in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Neither Mid-Coast nor Waldoboro has failed to disclose or will
fail to disclose to Union Bankshares any information which is material to this
Agreement or the transactions contemplated herein or in the Transaction
Documents.
6.24 Agreements with Banking Authorities. Neither Mid-Coast nor
Waldoboro (i) is a party to any commitment, letter (other than letters addressed
to regulated depository institutions or their holding companies generally),
written agreement, or memorandum of understanding with, or Order to cease and
desist, or subject to any Order or directive specifically naming or referring to
Mid-Coast or Waldoboro, (ii) has been required to adopt any board resolution by,
any federal or state governmental entity charged with the supervision or
regulation of depository institutions or depository institution holding
companies or engaged in the insurance of bank deposits which is currently in
effect and restricts materially the conduct of its business, or in any manner
relates to its capital adequacy, loan loss allowances or reserves, credit
policies, management or overall safety and soundness or such entity's ability to
perform its obligations hereunder, (iii) has received written notification from
any such federal or state governmental entity that any such Person may be
requested to enter into, or otherwise be subject to, any such commitment,
letter, written agreement, memorandum of understanding or cease and desist
Order. Neither Mid-Coast nor Waldoboro has been informed by any Bank Regulator
that it is contemplating issuing or requesting any such Order, directive,
agreement, memorandum of
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understanding, commitment letter or similar submission. Neither Mid-Coast nor
Waldoboro is a party to any agreement or arrangement entered into in connection
with the consummation of a federally assisted acquisition of a depository
institution pursuant to which Mid-Coast or Waldoboro is entitled to receive
financial assistance or indemnification from any governmental agency.
6.25 Compliance with Applicable Law. Each of Mid-Coast and Waldoboro
holds, and has at all times held, all Permits necessary for the lawful conduct
of its business under and pursuant to all, and has complied with and is not in
Default in any respect under any, applicable Law or Order, rule, of any
Governmental Authority relating to Mid-Coast or Waldoboro, respectively, and
neither Mid-Coast nor Waldoboro has any Knowledge of nor has received notice of
any violations of any of the above. Since January 1, 1996, each of Mid-Coast and
Waldoboro has timely filed, and subsequent to the date hereof will timely file,
all reports, registrations and statements, together with any amendments required
to be made with respect thereto, that were and are required to be filed with any
Regulatory Authorities and has paid all fees and assessments due and payable in
connection with any of the foregoing.
6.26 Year 2000. To the Knowledge each of Mid-Coast's and Waldoboro's
management, neither Mid-Coast's nor Waldoboro's computer systems contain any
material deficiencies relating generally to formatting for entering dates
(commonly referred to and referred to herein as the Year 2000 problem) and all
of such computer systems comply in all material respects with all regulations,
including FFIEC statements and guidance and OTS requirements and trade
organization guidelines concerning the Year 2000 problem.
6.27 State Takeover Laws. Mid-Coast and Waldoboro have taken all
necessary action to exempt the transactions contemplated by this Agreement from,
or if necessary to challenge the validity or applicability of, any applicable
"moratorium," "fair price," "business combination," "control share," or other
anti-takeover Laws (collectively, "Takeover Laws") under the MBCA and DGCL.
6.28 Opinion of Financial Advisor. Mid-Coast has received the opinion
of its financial advisor dated the date of this Agreement, to the effect that,
as of the date thereof, the Merger Consideration is fair, from a financial point
of view, to the holders of Mid-Coast Common Stock, a signed copy of which will
be delivered to Union Bankshares promptly after receipt thereof.
6.29 Board Recommendation. The Board of Directors of Mid-Coast, at a
meeting duly called and held, has by unanimous vote of those directors present
(who constituted all of the directors then in office) (i) determined that this
Agreement and the transactions contemplated hereby, including the Merger, the
Subsidiary Merger, and the Option Agreement and the transactions contemplated
thereby, taken together, are fair to and in the best interests of the
stockholders; and (ii) resolved to recommend that the holders of the shares of
Mid-Coast Common Stock approve this Agreement.
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ARTICLE 7
REPRESENTATIONS, WARRANTIES AND COVENANTS OF UNION BANKSHARES
For purposes of this Article 7, except where the context requires
otherwise, any reference to Union Bankshares in this Article 7 shall be deemed
to include Union Bankshares and Union Trust and any reference to "material,"
Material Adverse Effect or a similar standard shall refer to the financial
condition, operations or other aspects of Union Bankshares and its Subsidiaries
including Union Trust taken as a whole. Union Bankshares represents and warrants
to Mid-Coast as follows:
7.1 Organization and Authority. Union Bankshares is a business
corporation and Union Trust is a trust company duly incorporated, validly
existing and in good standing under the laws of the State of Maine and each has
the corporate power and authority to own, lease and operate its properties and
assets and to carry on its business as now being conducted.
7.2 Authorization. The execution, delivery and performance of this
Agreement by Union Bankshares and Union Trust and the consummation of the
transactions contemplated hereby have been duly authorized by the Boards of
Directors of Union Bankshares and Union Trust respectively, subject to receipt
of all required regulatory approvals. No other corporate proceedings on the part
of Union Bankshares are necessary to authorize the execution and delivery of
this Agreement and the performance by Union Bankshares of the terms hereof. This
Agreement is a valid and binding obligation of Union Bankshares enforceable
against Union Bankshares in accordance with its terms except as may be limited
by applicable bankruptcy, insolvency, reorganization or moratorium or other
similar laws affecting creditors' rights generally and except that the
availability of equitable remedies is within the discretion of the appropriate
court and except that it is subject to approval of applicable Regulatory
Authorities.
Neither the execution, delivery or performance of this Agreement by
Union Bankshares, nor the consummation of the transactions contemplated hereby,
nor compliance by Union Bankshares with any of the provisions hereof, will (a)
in any material respect violate, conflict with, or result in a breach of any
provision of, or constitute a Default (or an event which, with notice or lapse
of time or both, would constitute a Default) under or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration, or the creation of any Lien, security interest,
charge or encumbrance upon any of the properties or Assets of Union Bankshares
or Union Trust under any terms, conditions or provisions of (i) Union
Bankshares' or Union Trust's Charter or Bylaws or (ii) except as set forth on
Schedule 7.2, any material note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which Union
Bankshares or Union Trust is a party or by which Union Bankshares or Union Trust
may be bound, or to which Union Bankshares or Union Trust or the properties or
assets of it may be subject, or (b) violate in any material respect any Law or
Order applicable to Union Bankshares or Union Trust or any of its properties or
Assets.
7.3 Information for Regulatory Filings. None of the information
supplied or to be supplied by Union Bankshares with respect to Union Bankshares
for inclusion in any documents to be filed with the SEC or any other Regulatory
Authority in connection with the transactions contemplated hereby will at the
time of filing of such documents contain any untrue statement of
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a material fact or omit to state a material fact required to be stated therein
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. All documents, financial statements, or
other information or materials which Union Bankshares shall provide for filing
with the SEC and any other Regulatory Authority in connection with the Merger
will, to the extent applicable, comply with GAAP.
7.4 Accuracy of Information. To the Knowledge of Union Bankshares and
its officers and directors, none of the information supplied or to be supplied
by Union Bankshares or Union Trust to Mid-Coast and Waldoboro relating to its
Assets and Liabilities, this Agreement and the Joint Proxy Statement, contains
any untrue statement of a material fact or omits to state a material fact
required to be stated therein in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. Union
Bankshares has not failed to disclose any information which is material to this
Agreement, the transactions contemplated herein, the Joint Proxy Statement or
the requisite applications and filings with appropriate Banking Regulations.
7.5 Operation of Business. Between the date hereof and the Effective
Date, or until the termination of this Agreement, Union Bankshares covenants and
agrees that it will take no action which would materially adversely affect or
materially delay the ability of Union Bankshares or Union Trust, respectively,
to obtain any necessary approvals of any Regulatory Authority required for the
transactions contemplated hereby or to perform its or Union Trust's covenants
and agreements under this Agreement, the Subsidiary Merger Agreement or the
Option Agreement, respectively.
7.6 Board Consent; Stockholders' Meeting.
(a) The Board of Directors of Union Bankshares shall adopt a
resolution recommending approval and adoption of this Agreement and the
Subsidiary Merger Agreement by Union Bankshares' stockholders, and, the Board of
Directors of Union Bankshares shall recommend approval and adoption of this
Agreement and the Subsidiary Merger Agreement by Union Bankshares' stockholders.
(b) Union Bankshares will (i) take all steps necessary to call,
give notice of, convene and hold a special meeting of its stockholders no later
than July 15, 2000 for the purpose of approving this Agreement and the
transactions contemplated hereby and for such other purposes as may be necessary
or desirable, and (ii) cooperate and consult with Mid-Coast with respect to each
of the foregoing matters. Said notice shall include notice of dissenter's
rights, if any, and shall solicit stockholders' proxies in favor of this
Agreement, and all notice shall be given in accordance with applicable Laws.
Except as may be required by fiduciary obligations, Union Bankshares and its
directors will support and vote in favor of a shareholder resolution approving
this Agreement and the transaction contemplated hereby including the Merger.
7.7 Information for Proxy Statement. None of the information supplied
or to be supplied by Union Bankshares or Union Trust with respect to each of
Union Bankshares and Union Trust for inclusion in (a) the Notice of Meeting and
Joint Proxy Statement to be mailed by Union Bankshares to its stockholders in
connection with the meeting referred to in Section 7.6
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hereof (the "Joint Proxy Statement") and (b) any other documents to be filed
with any Regulatory Authority in connection with the transactions contemplated
hereby will at the time the Proxy Statement is mailed to holders of Union
Bankshares' Common Stock, as may be amended at the time of Union Bankshares
Stockholders' Meeting, and at the time of filing of such other documents,
respectively, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. All documents, financial statements, or other information or
materials which Union Bankshares or Union Trust shall provide for filing with
any Regulatory Authority in connection with the Merger and the Subsidiary Merger
will, to the extent applicable, comply with GAAP.
7.8 Vote Required. The affirmative vote of the holders of at least
sixty-seven percent (67%) of the outstanding shares of Union Bankshares' Common
Stock is the only vote of the stockholders of Union Bankshares necessary to
approve the Merger (with respect to Union Bankshares) and related transactions
contemplated hereby. The affirmative vote of at least a majority of the
outstanding shares of capital stock of Union Trust is the only vote of the
stockholders of Union Trust necessary to approve the Subsidiary Merger and
related transactions contemplated thereby.
7.9 Agreements with Banking Authorities. Neither Union Bankshares nor
Union Trust (i) is a party to any commitment, letter (other than letters
addressed to regulated depository institutions or their holding companies
generally), written agreement, or memorandum of understanding with , or Order to
cease and desist, or subject to any Order or directive specifically naming or
referring to Union Bankshares or Union Trust, (ii) has been required to adopt
any board resolution by, any federal or state governmental entity charged with
the supervision or regulation of depository institutions or depository
institution holding companies or engaged in the insurance of bank deposits which
is currently in effect and restricts materially the conduct of its business, or
in any manner relates to its capital adequacy, loan loss allowances or reserves,
credit policies, management or overall safety and soundness or such entity's
ability to perform its obligations hereunder, (iii) has received written
notification from any such federal or state governmental entity that any such
Person may be requested to enter into, or otherwise be subject to, any such
commitment, letter, written agreement, memorandum of understanding or cease and
desist Order. Neither Union Bankshares nor Union Trust has been informed by any
Bank Regulator that it is contemplating issuing or requesting any such Order,
directive, agreement, memorandum of understanding, commitment letter or similar
submission. Neither Union Bankshares nor Union Trust is a party to any agreement
or arrangement entered into in connection with the consummation of a federally
assisted acquisition of a depository institution pursuant to which Union
Bankshares or Union Trust is entitled to receive financial assistance or
indemnification from any governmental agency.
7.10 Opinion of Financial Advisor. Union Trust has received the opinion
of its financial advisor dated the date of this Agreement, to the effect that,
as of the date thereof, the Merger Consideration is fair, from a financial point
of view, to the holders of Union Bankshares' Common Stock, a signed copy of
which will be delivered to Mid-Coast promptly after receipt thereof.
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7.11 Board Recommendation. The Board of Directors of Union Bankshares,
has by unanimous vote of all of the directors then in office (i) determined that
this Agreement and the transactions contemplated hereby, including the Merger,
the Subsidiary Merger, and the Option Agreement and the transactions
contemplated thereby, taken together, are fair to and in the best interests of
the stockholders; and (ii) resolved to recommend that the holders of the shares
of Union Bankshares' Common Stock approve this Agreement.
7.12 Purchaser Investigation. Union Bankshares acknowledges that: (i)
it has had the opportunity to visit with Mid-Coast and meet with its
representative officers and other representatives to discuss the business,
assets, liabilities, reserves, financial condition, cash flow and operations of
Mid-Coast, and (ii) substantially all materials and information requested by
Union Bankshares have been provided to Union Bankshares to the reasonable
satisfaction of such party. Union Bankshares acknowledges that it has made its
own independent examination, investigation, analysis and evaluation of
Mid-Coast, including its own estimate of the value of Mid-Coast business. Union
Bankshares acknowledges that it has undertaken such investigation (including a
review of the assets, liabilities, books, records and contracts of Mid-Coast) as
Union Bankshares deems adequate, including that described above. Notwithstanding
such investigation, Union Bankshares shall be entitled to rely upon the
representation, warranties and covenants of Mid-Coast and Waldoboro set forth in
this Agreement and the related Transaction Documents, including but not limited
to Section 6.17, Section 6.23 and the certificate to be delivered to Union
Bankshares pursuant to Section 8.3(a).
7.13 Financing. Union Bankshares shall not require any financing from
any third-party source as a condition or contingency to the payment in full of
the Merger Consideration as contemplated under this Agreement and shall deposit
the Merger Consideration with the Exchange Agent from its available working
capital and cash flow.
7.14 Minimum Capital. Union Bankshares satisfies, and subsequent to the
payment in full of the Merger Consideration will satisfy, the minimum capital
requirements imposed by the FRB. Union Trust satisfies the minimum capital
requirements imposed by the Bureau of Banking and the FRB.
7.15 Professional Fees. Except for New England Business Advisors, Inc.,
neither Union Bankshares or Union Trust, nor any of their respective officers,
directors, employees, or Affiliates has employed any broker or finder or
incurred any Liability for any financial advisory fees, investment bankers'
fees, brokerage fees, commissions, or finders' fees in connection with this
Agreement or the transactions contemplated hereby.
ARTICLE 8
CONDITIONS TO CLOSING
The obligations of the Parties under this Agreement, except as
otherwise provided herein, shall be subject to the satisfaction or waiver of the
following conditions on or prior to the Closing:
8.1 Conditions to Each Party's Obligations to Effect the Merger. The
respective obligation of each Party to effect the Merger shall be subject to the
following conditions:
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(a) Stockholder Approval. The stockholders of Union Bankshares
shall have approved this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent required by Law,
the provisions of any governing instruments, or the rules of the NASD.
(b) Stockholder Approval. The stockholders of Mid-Coast shall have
approved this Agreement, and the consummation of the transactions contemplated
hereby, including the Merger, as and to the extent required by Law, the
provisions of any governing instruments, or the rules of the NASD.
(c) Regulatory Approvals. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities required
for consummation of the Merger and the Subsidiary Merger shall have been
obtained or made and shall be in full force and effect and all waiting periods
required by Law shall have expired. No Consent obtained from any Regulatory
Authority which is necessary to consummate the transactions contemplated hereby
or in the Subsidiary Merger Agreement shall be conditioned or restricted in a
manner (including requirements relating to the raising of additional capital or
the disposition of Assets) which in the judgment of the Board of Directors of
Union Bankshares or Mid-Coast would so materially and adversely impact the
conduct of the combined businesses of Union Bankshares and Mid-Coast that, had
such condition or requirement been known, such Party would not, in its
reasonable judgment, have entered into this Agreement.
(d) No Restraining Action. No court or governmental or Regulatory
Authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any Law or Order (whether temporary, preliminary or
permanent) or taken any other action which prohibits, restricts in any manner or
makes illegal the consummation of the transactions contemplated by this
Agreement or the Subsidiary Merger Agreement.
(e) Consents and Approvals. Each Party shall have obtained any and
all Consents required for consummation of the Merger (other than those referred
to in Section 8.1(c)) and the Subsidiary Merger or for the preventing of any
Default under any Contract or Permit of such Party which, if not obtained or
made, would have, individually or in aggregate, a Material Adverse Effect on
either Party.
8.2 Conditions to Obligations of Mid-Coast to Effect the Merger. The
obligations of Mid-Coast to effect the Merger shall be subject to the following
additional conditions:
(a) Representations and Warranties. The representations and
warranties of Union Bankshares set forth in this Agreement shall be true and
correct in all material respects (except to the extent such representation or
warranty is qualified by materiality in which case such representation or
warranty shall be true and correct) as of the date of this Agreement and as of
the Closing as though made at and as of the Closing, except as otherwise
contemplated by this Agreement or consented to in writing by Mid-Coast, and
Union Bankshares shall deliver at Closing an appropriate certificate to that
effect.
(b) Performance of Obligations. Union Bankshares shall have
performed in all material respects all obligations and complied with all
covenants required by it under this
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Agreement prior to the Closing and Union Bankshares shall deliver at Closing an
appropriate certificate to that effect.
(c) Opinion of Counsel. Mid-Coast shall have received an opinion of
Peabody & Arnold LLP, counsel to Union Bankshares and Union Trust, dated as of
the Closing, in form reasonably acceptable to Mid-Coast and substantially
covering such matters set forth in Exhibit D.
(d) Certificates. Union Bankshares shall have delivered to
Mid-Coast (i) a certificate, dated as of the Closing and signed on its behalf by
its chief executive officer and its chief financial officer, to the effect that
the conditions set forth in Section 8.2, as they apply to Union Bankshares, and
Section 8.3 have been satisfied, and (ii) certified copies of resolutions duly
adopted by Union Bankshares' Board of Directors and stockholders evidencing the
taking of all corporate action necessary to authorize the execution, delivery
and performance of the Transaction Documents, and the consummation of the
transactions contemplated hereby and thereby, all in such reasonable detail as
Mid-Coast and its counsel shall request.
8.3 Conditions to Obligations of Union Bankshares to Effect the Merger.
The obligations of Union Bankshares to effect the Merger shall be subject to the
following additional conditions:
(a) Representations and Warranties. The representations and
warranties of Mid-Coast and Waldoboro set forth in this Agreement shall be true
and correct in all material respects (except to the extent such representation
or warranty is qualified by materiality in which case such representation or
warranty shall be true and correct) as of the date of this Agreement and as of
the Closing as though made at and as of the Closing, except as otherwise
expressly contemplated by this Agreement or consented to in writing by Union
Bankshares, and Mid-Coast shall deliver at Closing an appropriate certificate to
that effect.
(b) Performance of Obligations. Mid-Coast and Waldoboro shall have
performed in all material respects all obligations and complied with all
covenants required by it under the Transaction Agreements including, but not
limited to, those set forth under Article 8 herein, prior to the Closing and
Mid-Coast shall deliver at Closing an appropriate certificate to that effect.
(c) Option Agreement. An Option Agreement substantially in the form
set forth on Exhibit B hereto shall have been executed by Mid-Coast; and
Mid-Coast shall have taken all steps necessary and desirable to perform the
Option Agreement.
(d) Certificates. Mid-Coast shall have delivered to Union
Bankshares (i) a certificate, dated as of the Closing and signed on its behalf
by its chief executive officer and its chief financial officer, to the effect
that the conditions set forth in Section 8.1, as they apply to Mid-Coast, and
Section 8.3 have been satisfied, and (ii) certified copies of resolutions duly
adopted by Mid-Coast's Board of Directors and stockholders evidencing the taking
of all corporate action necessary to authorize the execution, delivery and
performance of the Transaction Documents, and the consummation of the
transactions contemplated hereby and thereby, all in such reasonable detail as
Union Bankshares and its counsel shall request.
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(e) Subsidiary Merger Agreement. Each of Union Trust and Waldoboro
shall have executed and delivered the Subsidiary Merger Agreement, substantially
in the form of Exhibit A hereto; and each shall have taken all steps necessary
or desirable to perform the Subsidiary Merger Agreement.
(f) Opinion of Counsel. Union Bankshares shall have received an
opinion of Thacher Proffitt & Wood, counsel to Mid-Coast, dated as of the
Closing, in form reasonably acceptable to Union Bankshares, and substantially
covering such matters set forth in Exhibit E.
(g) Environmental Insurance. Mid-Coast shall have purchased, at its
sole expense, as evidenced by a binder, an environmental insurance policy (the
"Environmental Insurance") from an underwriter authorized to conduct business in
the state of Maine which shall, at a minimum, and to the sole satisfaction of
Union Bankshares, provide coverage for Union Bankshares (with Waldoboro and
Mid-Coast as additional named insureds) for a period of no less than ten years
from the Effective Date for the following liabilities relating to the Rockland
branch location (i) on-site remediation; (ii) off-site remediation; (iii)
off-site personal injury and property loss; (iv) legal liability; and (v)
business interruption. The Environmental Insurance shall in all respects be
subject to the satisfaction of Union Bankshares in its sole discretion.
ARTICLE 9
ADDITIONAL AGREEMENTS OF THE PARTIES
9.1 Proxy Statement; Stockholder Approval. As soon as reasonably
practicable after execution of this Agreement, each of Union Bankshares and
Mid-Coast shall call a Stockholders' Meeting, to be held as soon as reasonably
practicable for the purpose of voting upon approval of this Agreement and the
Merger and such other related matters as each may deem appropriate. In
connection with the Stockholders' Meetings, (i) Union Bankshares and Mid-Coast
shall prepare and file with the SEC a Joint Proxy Statement and mail such Joint
Proxy Statement to their respective stockholders, (ii) the Parties shall furnish
to each other all information concerning them that they may reasonably request
in connection with such Joint Proxy Statement, (iii) the Board of Directors of
Union Bankshares and Mid-Coast shall recommend to their respective stockholders
the approval of the matters submitted for approval (unless the Board of
Directors of either Union Bankshares or Mid-Coast, after having consulted with
and considered the advice of outside legal counsel, determines in good faith
that the making of such recommendation, or the failure to withdraw or modify its
recommendation, would constitute a breach of fiduciary duties of the members of
such Board of Directors to its stockholders under applicable law), and (iv) the
Boards of Directors and officers of Union Bankshares and Mid-Coast shall use
their reasonable best efforts to obtain such stockholders' approval (unless the
Board of Directors of Union Bankshares or Mid-Coast, after having consulted with
and considered the advice of outside counsel, determines in good faith that the
taking of such actions would constitute a breach of fiduciary duties of the
members of such Board of Directors to Union Bankshares' and Mid-Coast's
stockholders under applicable law). Union Bankshares and Mid-Coast shall make
all necessary filings with respect to the Merger under the Securities Laws.
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9.2 Applications; Regulatory Approvals. As soon as practicable after
the date hereof, each of Union Bankshares, Union Trust, Mid-Coast and Waldoboro
shall take all reasonable efforts to prepare all necessary documentation to
effect all necessary filing and to obtain all necessary permits, consents,
approvals and authorizations of all third parties and Regulatory Authorities
necessary to consummate the transaction contemplated by this Agreement. Union
Bankshares, Union Trust, Mid-Coast and Waldoboro will each cooperate with the
other and will each furnish the other and the other's counsel with all
information concerning themselves, their subsidiaries, directors, officers and
stockholders and such other matters as may be necessary or advisable in
connection with any application, petition or any other statement or application
made by or on behalf of Union Bankshares, Union Trust, Mid-Coast and Waldoboro
to any Regulatory Authority in connection with the transaction contemplated by
this Agreement. Union Bankshares, Union Trust, Mid-Coast and Waldoboro shall
have the right to view in advance all filings and approve in advance all
characterizations of the information relating to them and any of their
respective subsidiaries which appear in any filing made in connection with the
transactions contemplated by this Agreement with any Regulatory Authority. In
addition, Union Bankshares, Union Trust, Mid-Coast and Waldoboro shall each
furnish to the other a final copy of each such filing made in connection with
the transactions contemplated by this Agreement with any Regulatory Authority.
9.3 Merger Filings with State Offices. Upon the terms and subject to
the conditions of this Agreement, Mid-Coast shall execute and file the
Certificate of Merger with the Secretary of State of Delaware in connection with
the Closing and Union Bankshares shall execute and file the Articles of Merger
with the Secretary of State of the State of Maine in connection with the
Closing.
9.4 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its commercially reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary,
proper, or advisable under applicable Laws to consummate and make effective, as
soon as reasonably practicable after the date of this Agreement, the
transactions contemplated by this Agreement, including using its commercially
reasonable efforts to lift or rescind any Order adversely affecting its ability
to consummate the transactions contemplated herein and to cause to be satisfied
the conditions referred to in Article 8 provided, that nothing herein shall
preclude either Party from exercising its rights under this Agreement or the
Option Agreement, as applicable. Each Party shall use, and shall cause each of
its Subsidiaries to use, its commercially reasonable efforts to obtain all
material Consents necessary or desirable (in the good faith judgment of the
Board of Directors of such Party) for the consummation of the transactions
contemplated by this Agreement.
9.5 Investigation and Disclosure.
(a) Prior to the Effective Date, Mid-Coast shall keep Union
Bankshares advised of all material developments relevant to its business and to
consummation of the Merger and the Subsidiary Merger and shall permit Union
Bankshares to make or cause to be made such investigation of the business and
properties of it and its Subsidiaries and of their respective financial and
legal conditions as Union Bankshares reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not
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interfere unnecessarily with normal operations. No investigation by Union
Bankshares shall affect the representations and warranties of Mid-Coast.
(b) Each Party agrees to give the other Party notice as soon as
practicable after any determination by it of any fact or occurrence relating to
such Party which represents, or is reasonably likely to represent, a material
breach of any representation, warranty, covenant or agreement of such Party or
which has had or is reasonably likely to have a Material Adverse Effect on its
business or operations.
9.6 Press Releases. Prior to the Closing, each Party shall consult with
the other as to the form and substance of any press release or other public
disclosure materially related to this Agreement or any other transaction
contemplated hereby; provided, that nothing in this Section 9.6 shall be deemed
to prohibit any Party from making any disclosure which its counsel deems
necessary or advisable in order to satisfy such Party's disclosure obligations
imposed by Law.
9.7 State Anti-Takeover Law. Mid-Coast shall take all necessary steps
to exempt the transactions contemplated by this Agreement from, or if necessary
to challenge the validity or applicability of, any applicable anti-takeover law
under the DGCL.
9.8 Employee Benefits and Contracts. Following the Effective Date,
Union Bankshares shall provide generally to former officers and employees of
Mid-Coast and Waldoboro employee benefits under employee benefit plans (other
than stock option or other plans involving the potential issuance of Union
Bankshares Common Stock), on terms and conditions which when taken as a whole
are substantially similar to those currently provided by Mid-Coast and Waldoboro
to their similarly situated officers and employees, except that there is no
matching contribution under the Union Bankshares' Section 401(k) plan; provided
however, this Section 9.8 shall not be deemed or construed to be an undertaking
or obligation on the part of Union Bankshares or Union Trust to provide the same
benefits which Mid-Coast or Waldoboro presently provide to their employees and
officers; and provided further that Union Bankshares and Union Trust shall have
no obligation to continue to provide after the Effective Date any benefits
currently provided to their employees or officers as of the date hereof, or
provided to their employees or officers at any time subsequent to the Effective
Date. For purposes of participation, vesting and (except in the case of Union
Bankshares' defined benefit plans) benefit accrual under Union Bankshares'
employee benefit plans, the service of the employees of Mid-Coast or Waldoboro
prior to the Closing shall be treated as service with Union Bankshares or Union
Trust for participation in such employee benefit plans. Following the Effective
Date, former employees of Mid-Coast or Waldoboro shall receive credit under
Union Bankshares' group health plans for all deductibles and co-payments made by
such former employees under the health plans maintained by Mid-Coast or
Waldoboro prior to the Effective Date, and health care coverage under Union
Bankshares group health plans shall be extended to former employees of Mid-Coast
and Waldoboro with no waiting period, and Union Bankshares will, use its best
efforts to provide that such coverage shall be without any exclusions for
pre-existing conditions and shall inform Mid-Coast in writing, within thirty
days of the date hereof, as to the efforts undertaken to secure a waiver of such
exclusions and whether such exclusions have been eliminated.
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9.9 Deliveries at Closing. At the Closing, all documents and
instruments shall have been duly and validly executed and delivered by all the
Parties hereto.
ARTICLE 10
EMPLOYMENT AND MANAGEMENT MATTERS
10.1 Employees.
(a) Upon the Effective Date, Union Bankshares and/or Union Trust,
as appropriate, shall retain and employ each officer and employee other than
Wesley E. Richardson employed by Mid-Coast or Waldoboro as of the Effective Date
(the "Retained Employees") for a period of one year from the Effective Date,
shall not reduce the base salary or base wages of Retained Employees during such
one-year period, including Retained Employees who are reassigned to jobs other
than Comparable Jobs. The term "Comparable Job" as used herein shall mean, with
respect to any Retained Employee, a position that (i) is to be performed within
twenty-five (25) miles of such Retained Employee's current office, and (ii) is
associated with a salary grade or range that is substantially the same grade or
salary range associated with the Retained Employee's position immediately prior
to the Effective Date, it being understood that in no event will a Comparable
Job mean a position in which the Retained Employee's actual base salary or base
pay is less than his base pay or base salary in effect immediately prior to the
Effective Date.
(b) Retained Employees terminated for "cause" as defined herein or
who voluntarily resign (except Retained Employees who resign following
reassignment to a job other than a Comparable Job) shall not be entitled to any
rights under Section 10.1(a). The term "cause" for purposes of this Section
10.1(b) shall mean personal dishonesty, incompetence, intentional failure to
perform stated duties, willful misconduct, breach of fiduciary duty involving
personal profit, conviction of a felony, or willful violation of any law, rule
or regulation (other than traffic violations or similar offenses).
(c) Except as described in Section 10.1(a) and Section 10.1(b),
Retained Employees will be subject to (i) the employment terms, conditions,
policies and rules applicable to other employees of Union Bankshares and/or
Union Trust including those set forth in Union Trust's Personnel Manual as the
same may be amended from time to time (the "Personnel Manual") and (ii) the
terms, conditions, policies and rules relating to vacation benefits, sick leave,
and other plans and benefits available to other Union Bankshares and Union Trust
employees, except as any such terms, conditions, policies and rules may be
modified by Section 9.8.
(d) Except as described in Sections 9.8 or 10.1(a), nothing in this
Agreement shall be construed to constitute a contract of employment with any
Retained Employee or to create any term or condition of employment of Retained
Employees not enjoyed as of the Effective Date by other employees of Union
Bankshares and/or Union Trust.
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10.2 Notices. Mid-Coast and Waldoboro shall be responsible for
notifying their employees of the terms of this Agreement as it affects them and
for complying with any applicable laws regarding such notices.
10.3 Directors' and Officers' Liability Insurance Coverage. Union
Bankshares shall maintain a "tail" directors' and officers' liability insurance
policy covering persons who are currently covered by such insurance policies of
Mid-Coast and Waldoboro for a period of four (4) years after the Effective Date
on terms generally no less favorable than those in effect on the date of this
Agreement; provided, however, that Union Bankshares may substitute therefore
policies providing at least comparable coverage containing terms and conditions
no less favorable than those in effect on the date of this Agreement; and
provided further that the annual cost of such insurance shall not be greater
than 125% the cost of such "tail" insurance to Mid-Coast and Waldoboro as of the
Effective Date. In addition to and without limiting the foregoing, if the
Effective Date shall be prior to May 11, 2000, Mid-Coast shall prepay the cost
of such "tail" insurance for a one year period commencing on May 11, 2000.
10.4 Indemnification. From and after the Effective Date through the
sixth anniversary of the Effective Date, Union Bankshares shall indemnify and
hold harmless each present and former director, officer and employee of
Mid-Coast and Waldoboro determined as of the Effective Date (the "Indemnified
Parties") against any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages or liabilities (collectively, "Costs")
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of matters existing or occurring at or prior to the Effective Date, whether
asserted or claimed prior to, at or after the Effective Date, to the fullest
extent to which such Indemnified Parties were entitled under Delaware law and
Mid-Coast's Certificate of Incorporation and Bylaws as in effect on the date
hereof.
Any Indemnified Party wishing to claim indemnification under this
Section 10.4, upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify Union Bankshares, but the failure to so
notify shall not relieve Union Bankshares of any liability it may have to such
Indemnified Party if such failure does not materially prejudice Union
Bankshares. In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Date), (i) Union
Bankshares shall have the right to assume the defense thereof and Union
Bankshares shall not be liable to such Indemnified Parties for any legal
expenses of other counsel or any other expenses subsequently incurred by such
Indemnified Parties in connection with the defense thereof, except that if Union
Bankshares elects not to assume such defense or counsel for the Indemnified
Parties advises that there are issues which raise conflicts of interest between
Union Bankshares and the Indemnified Parties, the Indemnified Parties may retain
counsel which is reasonably satisfactory to Union Bankshares, and Union
Bankshares shall pay, promptly as statements therefore are received, the
reasonable fees and expenses of such counsel for the Indemnified Parties (which
may not exceed one firm in any jurisdiction unless the use of one counsel for
such Indemnified Parties would present such counsel with a conflict of
interest), (ii) the Indemnified Parties will cooperate in the defense of any
such matter, and (iii) Union Bankshares shall not be liable for any settlement
effected without its prior written consent.
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In the event that Union Bankshares or any of its respective 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, the successors and assigns of such
entity shall assume the obligations set forth in this Section 10.4, which
obligations are expressly intended to be for the irrevocable benefit of, and
shall be enforceable by, each of the Indemnified Parties and his or her heirs or
Representatives subject to the limitations set forth in this Article 10.
ARTICLE 11
TERMINATION AND REMEDIES
For purposes of this Agreement, any reference to Union Bankshares in
this Article 11 shall be deemed to include Union Bankshares and Union Trust and
any reference to Mid-Coast in this Article 11 shall be deemed to include
Mid-Coast and Waldoboro.
11.1 Parties' Joint Remedies. In the event any Regulatory Authority
imposes requirements that do not meet the standards for termination as set forth
in Section 11.2, then the Parties agree to amend this Agreement to conform to
such regulatory requirements; provided however, that no Party shall be obligated
to agree to such amendment, if in its sole discretion such amendment would
require a new vote of its stockholders to approve the Agreement, as amended, or
if it otherwise causes a material change in the terms of the Agreement or the
Merger such that either Party's Board of Directors no longer deems the Merger to
be in the best interest of such Party's stockholders; and provided further that
such amendment shall only be made in accordance with Section 12.6.
11.2 Termination. This Agreement may be terminated and the Merger
abandoned, either before or after approval by the stockholders of Mid-Coast and
Union Bankshares any time prior to the Effective Date as follows:
(a) At any time on or prior to the Effective Date, by the mutual
consent of the Parties hereto;
(b) By either Party hereto, at any time after any Regulatory
Authority or Bank Regulator has denied any application for any approval or
clearance required to be obtained as a condition to the consummation of the
Merger or the Subsidiary Merger and the time period for all appeals or requests
for reconsideration thereof has expired;
(c) By Union Bankshares, if holders of twenty percent (20%) or more
of the outstanding Mid-Coast Common Stock exercise statutory appraisal rights
pursuant to Section 262 of the DGCL;
(d) By either Party (provided that the terminating Party is not
then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a material breach by the
other Party of any representation or warranty contained in this Agreement which
cannot be or has not been cured within 30 days after the
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giving of written notice to the breaching Party of such breach, such that the
conditions set forth in Sections 8.2(a) and 8.3(a), as applicable, would not
then be satisfied by the breaching Party; or
(e) By either Party (provided that the terminating Party is not
then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a material breach of the
other Party of any covenant or agreement contained in this Agreement which
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching Party of such breach, such that the conditions set forth
in Sections 8.2(a) and 8.3(a), as applicable, would not then be satisfied by the
breaching Party; or
(f) By either Party (provided that the terminating Party is not
then in material breach of any representation, warranty, covenant or other
agreement contained in this Agreement) in the event (i) any Consent of any
Regulatory Authority (other than as set forth under Section 11.2(b) required for
consummation of the Merger and the Subsidiary Merger and the other transactions
contemplated hereby and thereby shall have been denied by final non-appealable
action of such authority or if any action taken by such authority is not
appealed within the time limit for appeal such that the conditions set forth in
Section 11.2(b) would not be satisfied, or (ii) the stockholders of Union
Bankshares or Mid-Coast fail to vote their approval of the matters relating to
this Agreement and the transactions contemplated hereby at the special meeting
of stockholders where such matters were presented to such stockholders for
approval and voted upon; or
(g) By either Party in the event that the Merger shall not have
been consummated by December 31, 2000, if the failure to consummate the
transactions contemplated hereby on or before such date is not caused by any
breach of this Agreement by the Party electing to terminate pursuant to this
Section 11.2(g); or
(h) By either Party (provided that the terminating Party is not
then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event that any of the conditions
precedent to the obligations of such Party to consummate the Merger or the
Subsidiary Merger cannot be satisfied or fulfilled by the date specified in
Section 11.2(g); or
(i) By either Party, if: (i) the Board of Directors of Mid-Coast
shall have authorized, recommended, publicly proposed or publicly announced an
intention to authorize, recommend or propose to the stockholders of Mid-Coast,
or has entered into an agreement with any Person (other than Union Bankshares)
to effect an alternative Acquisition Proposal or (ii) a tender offer or exchange
offer for 25% or more of the outstanding shares of Mid-Coast Common Stock is
commenced and the Board of Directors of Mid-Coast recommends that the
stockholders of the company tender their shares in such tender or exchange
offer; provided that Mid-Coast shall not be entitled to exercise any termination
rights under clause (i) or (ii) of this Section 11.2(i) unless (x) any action of
the Board of Directors of Mid-Coast is taken in good faith by the Board of
Directors of Mid-Coast after consultation with and consideration of the advice
of its outside counsel and financial advisors, in order to discharge properly
its fiduciary duties to its stockholders and (y) Mid-Coast has complied with its
obligations in Article 8;
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(j) By Union Bankshares, if the Board of Directors of Mid-Coast
shall withdraw, modify or change its approval or recommendation of this
Agreement, the Option Agreement, the Subsidiary Merger or the Merger in a manner
adverse to Union Bankshares, provided that Union Bankshares is not then in
material breach of any representation, warranty, covenant or agreement contained
in this Agreement;
(k) By Mid-Coast, if the Board of Directors of Union Bankshares
shall withdraw, modify or change its approval or recommendation of this
Agreement or the Merger in any manner adverse to Mid-Coast, provided that
Mid-Coast is not then in material breach of any representation, warranty,
covenant or agreement contained in this Agreement.
(l) By Union Bankshares if, in the opinion of its environmental
consultant, Woodard & Curran, Inc. (a) any of the Phase I site assessments
conducted pursuant to Section 5.11 reveals the presence of any condition at any
Mid-Coast Property which creates or has the potential to create a Liability on
the part of any of Mid-Coast, Waldoboro, Union Bankshares or Union Trust (an
"Environmental Condition") and (b) where such Liability would be in excess of
$25,000.00 as a result of any one or a combination of the following (i) further
investigation of the Environmental Condition, necessary or desirable in the
reasonable opinion of Union Bankshares, its environmental consultant or its
counsel, including but not limited to a Phase II site assessment; (ii) obtaining
environmental insurance for coverage of all Liabilities related to the
Environmental Condition including but not limited to, remediation, personal and
property damage, legal liability and business interruption, all on terms and
conditions satisfactory to Union Bankshares in its reasonable discretion; (iii)
any remediation activities, necessary or desirable in the reasonable opinion of
Union Bankshares, its environmental consultant or its counsel, with respect to
the Environmental Condition, whether or not such activities are compulsory or
voluntary under any applicable Law or Governmental Authority; and (iv) the
diminution in value of the effected Mid-Coast Property as a result of the
presence of the Environmental Condition, as compared to the fair market value of
such property in the absence of such Environmental Condition, where such
diminution is determined by a licensed appraisal firm, mutually acceptable to
Mid-Coast and Waldoboro, and in each case (clauses (i) through (iv) inclusive)
including but not limited to, the reasonable fees and expenses of consultants,
engineers, contractors, appraisal firms and attorneys.
11.3 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 11.2, this Agreement shall
become void and have no effect, except that (i) the provisions of Article 12
shall survive any such termination and abandonment, and (ii) a termination
pursuant to Sections 11.1(d), 11.1(e) or 11.1(h) shall not relieve the breaching
Party from Liability for an uncured willful breach of a representation,
warranty, covenant, or agreement giving rise to such termination.
11.4 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Date except this Section 11.4 and
Articles 1, 2, 3, 4 and 12 and Section 10.3 and 10.4.
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ARTICLE 12
MISCELLANEOUS
12.1 Entire Agreement. This Agreement (and the documents, instruments
and certificates contemplated hereby) embodies the entire understanding of the
Parties in relation to the subject matter herein and supersedes all prior
understandings or agreements, oral or written, between the Parties hereto.
12.2 Headings. The headings and subheadings in this Agreement, except
the terms identified for definition in Article 1 and elsewhere in this
Agreement, are inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or any provision hereof.
12.3 Duplicate Originals. This Agreement may be executed in any number
of duplicate originals, any one of which when fully executed by all Parties
shall be deemed to be an original without having to account for the other
originals.
12.4 Governing Law. This Agreement and the rights and obligations
hereunder shall be governed and construed by the laws of the State of Maine.
12.5 Successors; No Third Party Beneficiaries. All terms and conditions
of this Agreement shall be binding on the successors and assigns of Mid-Coast
and Union Bankshares. Except as otherwise specifically provided in this
Agreement including but not limited to Section 10.1, nothing expressed or
referred to in this Agreement is intended or shall be construed to give any
Person other than Mid-Coast and Union Bankshares any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provisions
contained herein, it being the intention of the Parties hereto that this
Agreement, the obligations and statements of responsibilities hereunder, and all
other conditions and provisions hereof are for the sole and exclusive benefit of
Mid-Coast and Union Bankshares and for the benefit of no other Person.
12.6 Modification; Assignment. To the extent permitted by Law, this
Agreement may be amended by a subsequent writing signed by each of the Parties
upon the approval of each of the Parties, whether before or after stockholder
approval of this Agreement has been obtained; provided, that after any such
approval by the holders of Mid-Coast Common Stock, there shall be made no
amendment that requires further approval by such stockholders without the
further approval of such stockholders; and further provided, that after any such
approval by the holders of Union Bankshares Common Stock, the provisions of this
Agreement shall not be amended after the special meeting of the stockholders of
Union Bankshares in a manner adverse to the holders of Union Bankshares Common
Stock without any requisite approval of the holders of the issued and
outstanding shares of Union Bankshares Common Stock entitled to vote thereon.
12.7 Notice. Any notice, request, demand, consent, approval or other
communication to any Party hereof shall be effective when received and shall be
given in writing, and delivered in person against receipt thereof, or sent by
certified mail, postage prepaid or courier service at its address set forth
below or at such other address as it shall hereafter furnish in writing to the
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others. All such notices and other communications shall be deemed given on the
date received by the addressee or its agent.
To: Mid-Coast
Mid-Coast Bancorp, Inc.
1768 Atlantic Highway
Waldoboro, Maine 04572
Attn: Wesley E. Richardson
Fax Number: (207) 832-7516
Copy to: Richard Schaberg, Esq.
Thacher Proffitt & Wood
1700 Pennsylvania Avenue, N.W.
Washington, DC 20006
Fax Number: (202) 347-6238
To: Union Bankshares
Union Bankshares Co.
66 Main Street
P. O. Box 479
Ellsworth, Maine 04605
Attn: Peter A. Blyberg
Fax Number: (207) 667-2865
Copy to: Kenneth F. Ehrlich, Esq.
Peabody and Arnold LLP
50 Rowes Wharf
Boston, Massachusetts 02110
Fax Number: (617) 951-2125
12.8 Waiver. Mid-Coast and Union Bankshares may waive their respective
rights, powers or privileges under this Agreement; provided that such waiver
shall be in writing; and further provided that no failure or delay on the part
of Mid-Coast or Union Bankshares to exercise any right, power or privilege under
this Agreement will operate as a waiver thereof, nor will any single or partial
exercise of any right, power or privilege under this Agreement preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege by Mid-Coast or Union Bankshares under the terms of this Agreement,
nor will any such waiver operate or be construed as a future waiver of such
right, power or privilege under this Agreement.
12.9 Fees and Expenses.
(a) Except as otherwise provided in this Section 12.9, each of the
Parties shall bear and pay all direct costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder, including
filing, registration and application fees, printing fees, and fees and expenses
of its own financial or other consultants, investment bankers, accountants, and
counsel, except that each of the Parties shall bear and pay one-half of the
filing
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fees payable in connection with the Joint Proxy Statement and printing costs
incurred in connection with the printing of the Joint Proxy Statement.
(b) Notwithstanding Section 12.9(a) above, if this Agreement is
terminated by Union Bankshares in accordance with Sections 11.2(d), (e) (i) or
(j), Mid-Coast shall be liable to Union Bankshares for all out-of-pocket costs
and expenses, including, without limitation, the reasonable fees and expenses of
lawyers, accountants and investment bankers, incurred by Union Bankshares in
connection with the entering into of this Agreement and the carrying out of any
and all acts contemplated hereunder ("Expenses").
(c) Notwithstanding Section 12.9(a) above, if this Agreement is
terminated by Mid-Coast in accordance with Sections 11.2(d), (e) (i) or (k),
Union Bankshares shall be liable to Mid-Coast for all of its Expenses.
(d) The Payment of Expenses is not an exclusive remedy, but is in
addition to any other rights or remedies available to either Party hereto at law
or in equity.
12.10 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provisions of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
12.11 Enforcement of Agreement. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
12.12 Brokers and Finders. In the event of a claim by any broker or
finder based upon his or its representing or being retained by or allegedly
representing or being retained by Union Bankshares or by Mid-Coast, each of
Mid-Coast and Union Bankshares, as the case may be, agrees to indemnify and hold
the other Party harmless of and from any Liability in respect of any such claim.
12.13 Mutual Covenant of Best Efforts and Good Faith. The Parties
mutually covenant and agree with each other that they will use their best
efforts to consummate the transactions herein contemplated and that they will
act and deal with each other in good faith as to this Agreement and all matters
arising from or related to it.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement and
Plan of Merger to be executed by their duly authorized representatives as of the
date first above written.
Attest: MID-COAST BANCORP, INC.
/s/ Sally Hutchins By: /s/ Peter A. Blyberg
- ----------------------------- -------------------------------------
Name: Peter A. Blyberg
Title: President
Attest: UNION BANKSHARES COMPANY
/s/ Samuel Cohen By: /s/ Wesley E. Richardson
- ----------------------------- -------------------------------------
Name: Wesley E. Richardson
Title: President
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EXHIBIT A
Subsidiary Merger Agreement
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EXHIBIT B
Option Agreement
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EXHIBIT C
Termination Agreement
50
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EXHIBIT D
Opinion of Peabody & Arnold LLP
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EXHIBIT E
Opinion of Thacher Proffitt & Wood
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Exhibit 10.1
EXHIBIT B
OPTION AGREEMENT
This Option Agreement ("Option Agreement") is dated as of March 27,
2000, between Mid-Coast Bancorp, Inc., a Delaware corporation ("Mid-Coast") and
Union Bankshares Company. ("Union Bankshares"), a Maine corporation.
RECITALS
WHEREAS, the Boards of Directors of Mid-Coast and Union Bankshares have
approved an Agreement and Plan of Merger by and between Union Bankshares and
Mid-Coast ("Merger Agreement") dated as of the date hereof providing for the
merger of Mid-Coast into Union Bankshares;
WHEREAS, as a condition to Union Bankshares' entry into the Merger
Agreement and to induce such entry, Mid-Coast has agreed to grant to Union
Bankshares the option set forth herein to purchase authorized but unissued
shares of Mid-Coast Common Stock;
NOW, THEREFORE, in consideration of the premises herein contained, the
parties agree as follows:
1. Definitions.
Capitalized terms defined in the Merger Agreement and used herein shall
have the same meanings as in the Merger Agreement.
2. Grant of Option.
Subject to the terms and conditions set forth herein, Mid-Coast hereby
grants to Union Bankshares an option ("Option") to purchase up to 149,960 shares
of Mid-Coast Common Stock, at a price of $6.00 per share payable in cash as
provided in Section 4 hereof; provided, however, that in the event Mid-Coast
issues or agrees to issue any shares of Mid-Coast Common Stock (other than as
permitted under the Merger Agreement) at a price less than $6.00 per share (as
adjusted pursuant to Section 6 hereof), the exercise price shall be equal to
such lesser price; in no event, however, shall the number of shares for which
the Option is exercisable exceed 19.9% of Mid-Coast's issued and outstanding
Common Stock without giving effect to any shares subject to or issued pursuant
to the Option.
3. Exercise of Option.
(a) Subject to compliance with applicable laws and regulations and
unless Union Bankshares shall have breached in any material respect and failed
to cure any material covenant or representation contained in the Merger
Agreement, Union Bankshares may exercise the Option, in whole or part, at any
time following the occurrence of a Purchase Event (as defined below).
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(b) As used herein, a "Purchase Event" shall mean any of the following
events or transactions occurring after the date hereof:
i. Mid-Coast or any of its Subsidiaries (each an "Mid-Coast
Subsidiary"), without having received Union Bankshares' prior written
consent, shall have entered into an agreement to engage in an
Acquisition Transaction (as hereinafter defined) with any person (the
term "person" for purposes of this Agreement having the meaning
assigned thereto in Sections 3(a)(9) and 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and the rules and
regulations thereunder) other than Union Bankshares or any of its
Subsidiaries (each a "Union Bankshares Subsidiary") or the Board of
Directors of Mid-Coast shall have recommended that the stockholders of
Mid-Coast approve or accept any Acquisition Transaction or shall have
failed to publicly oppose an Acquisition Transaction, in each case with
any person other than Union Bankshares or a Union Bankshares
Subsidiary. For purposes of this Agreement, "Acquisition Transaction"
shall mean (w) a merger or consolidation, or any similar transaction,
involving Mid-Coast or any Significant Subsidiary (as defined in Rule
1-02(w) of Regulation S-X promulgated by the Securities and Exchange
Commission (the "SEC") of Mid-Coast, (x) a purchase, lease or other
acquisition of all or a substantial portion of the assets of Mid-Coast
or any Significant Subsidiary of Mid-Coast, (y) a purchase or other
acquisition (including by way of merger, consolidation, share exchange
or otherwise) of securities representing 10% or more of the voting
power of Mid-Coast or any Significant Subsidiary of Mid-Coast, or (z)
any substantially similar transaction; provided, however, that in no
event shall any merger, consolidation, purchase, liquidation, dividend
in kind, reorganization or similar transaction involving only Mid-Coast
and one or more of its Subsidiaries or involving only any two or more
of such Subsidiaries, be deemed to be an Acquisition Transaction,
provided any such transaction is not entered into in violation of the
terms of the Merger Agreement;
ii. Mid-Coast or any Mid-Coast Subsidiary, without having received
Union Bankshares' prior written consent, shall have authorized,
recommended, proposed or publicly announced its intention to authorize,
recommend or propose, to engage in an Acquisition Transaction with any
person other than Union Bankshares or a Union Bankshares Subsidiary, or
the Board of Directors of Mid-Coast shall have publicly withdrawn or
modified, or publicly announced its intention to withdraw or modify, in
any manner adverse to Union Bankshares, its recommendation that the
stockholders of Mid-Coast approve the transactions contemplated by the
Merger Agreement;
iii. The shareholders of Mid-Coast shall have voted and failed to
approve and adopt the Merger Agreement and the Merger at a meeting
which has been held for that purpose or any adjournment or postponement
thereof, or such meeting shall not have been held in violation of the
Merger Agreement or shall have been canceled prior to termination of
the Merger Agreement if, prior to such meeting (or if such meeting
shall not have been held or shall have been canceled, prior to such
termination), any person (other than the Union Bankshares or a Union
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Bankshares Subsidiary) shall have made a proposal to Mid-Coast or its
stockholders by public announcement or written communication that is or
becomes the subject of public disclosure to engage in an Acquisition
Transaction;
iv. Any person other than Union Bankshares, any Union Bankshares
Subsidiary or any Mid-Coast Subsidiary shall have acquired beneficial
ownership or the right to acquire beneficial ownership of 10% or more
of the outstanding shares of Common Stock (the term "beneficial
ownership" for purposes of this Option Agreement having the meaning
assigned thereto in Section 13(d) of the 1934 Act, and the rules and
regulations thereunder);
v. Any person other than Union Bankshares or any Union Bankshares
Subsidiary shall have made a bona fide proposal to Mid-Coast or its
stockholders by public announcement or written communication that is or
becomes the subject of public disclosure to engage in an Acquisition
Transaction;
vi. After an overture is made by a third party to Mid-Coast or its
stockholders to engage in an Acquisition Transaction, Mid-Coast shall
have breached any covenant or obligation contained in the Merger
Agreement and such breach (x) would entitle Union Bankshares to
terminate the Merger Agreement and (y) shall not have been cured to the
satisfaction of Union Bankshares; or
vii. Any person other than Union Bankshares or any Union Bankshares
Subsidiary, other than in connection with a transaction to which Union
Bankshares has given its prior written consent, shall have filed an
application or notice with any Regulatory Authority, whether in draft
or final form, for approval to engage in an Acquisition Transaction.
(c) In the event Union Bankshares determines to exercise the Option, it
shall send to Mid-Coast 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 (3) business days nor later than twenty (20) business days from the Notice
Date for the closing of such purchase ("Closing Date"); provided that if prior
notification to or approval of any Regulatory Authority is required in
connection with such purchase, Union Bankshares shall promptly file 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.
(d) The Option shall expire and terminate to the extent not previously
exercised, upon the earliest to occur of the following (each a "Termination
Event"):
i. the Effective Date of the Merger; or
ii. eight (8) months after the occurrence of a Purchase Event; or
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<PAGE> 4
iii. the Merger Agreement is terminated in accordance with its
terms except for any termination resulting from a material
breach by Mid-Coast of any of its representations, warranties
or covenants, or the failure of the stockholders of Mid-Coast
to approve the Merger Agreement; or
iv. (iv) December 31, 2000.
(e) Notwithstanding the termination of the Option, Union Bankshares
shall be entitled to purchase any shares with respect to which it has exercised
the Option in accordance with the terms hereof prior to the termination of the
Option. The termination of the Option shall not affect any rights hereunder
which by their terms extend beyond the date of such termination.
(f) Mid-Coast shall notify Union Bankshares promptly in writing of the
occurrence of any Purchase Event, it being understood that the giving of such
notice by Mid-Coast shall not be a condition to the right of Union Bankshares to
exercise the Option.
4. Payment and Delivery of Certificates.
(a) At the closing referred to in Section 3 hereof, Union Bankshares
shall pay to Mid-Coast the aggregate purchase price for the shares of Mid-Coast
Common Stock purchased pursuant to the exercise of the Option in immediately
available funds by a wire transfer to a bank account designated by Mid-Coast or
if no account has been designated in a manner determined to be reasonable by
Union Bankshares.
(b) At such closing, simultaneously with the delivery of cash as
provided in subsection (a), Mid-Coast shall deliver to Union Bankshares a
certificate or certificates representing the number of shares of Mid-Coast
Common Stock purchased by Union Bankshares and Union Bankshares shall deliver to
Mid-Coast a letter agreeing that Union Bankshares will not offer to sell or
otherwise dispose of such shares in violation of applicable law or the
provisions of this Option Agreement.
5. Representations.
Mid-Coast hereby represents, warrants and covenants to Union Bankshares as
follows:
(a) Mid-Coast shall at all times maintain sufficient authorized but
unissued shares of Mid-Coast Common Stock so that the Option may be exercised
without authorization of additional shares of Mid-Coast Common Stock.
(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 and will be delivered free and clear of all
claims, liens, encumbrances and security interests and not subject to any
preemptive rights.
(c) Mid-Coast will not, by amendment of its certificate of
incorporation or through reorganization, consolidation, merger, dissolution or
sale of assets, or by any other voluntary act, avoid or seek to avoid the
observance or performance of any of the covenants, stipulations or conditions to
be observed or performed hereunder by it; and will promptly take all
4
<PAGE> 5
action as may from time to time be required (including cooperating fully with
Union Bankshares in preparing applications or notices and providing information
with respect to regulatory approval) in order to permit Union Bankshares to
exercise the Option and Mid-Coast duly and effectively to issue shares of
Mid-Coast Common Stock pursuant hereto.
6. Adjustment Upon Changes in Capitalization.
If Mid-Coast should split or combine the Mid-Coast Common Stock, or pay
a stock dividend or other stock distribution in Mid-Coast Common Stock, or
otherwise change the Mid-Coast Common Stock into any other securities, or make
any other dividend or distribution in respect of the Mid-Coast Common Stock
(other than normal cash dividends), then the number of shares of Mid-Coast
Common Stock subject to the Option shall be adjusted so that, after such
issuance, it equals 19.9% of the number of shares of Mid-Coast 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 Mid-Coast to breach any provisions of the Merger Agreement. Whenever
the number of shares of Mid-Coast Common Stock purchasable upon exercise hereof
is adjusted as provided in this Section 6, the Option exercise price shall be
adjusted by multiplying the Option exercise price by a fraction, the numerator
of which shall be equal to the number of shares of Mid-Coast Common Stock
purchasable prior to the adjustment and the denominator of which shall be equal
to the number of shares of Mid-Coast Common Stock purchasable after the
adjustment.
7. Registration Rights.
Mid-Coast shall, if requested by Union Bankshares, as expeditiously as
possible file a registration statement in order to permit the sale or other
disposition of this Option and/or the shares of Mid-Coast Common Stock acquired
upon exercise of the Option in accordance with the intended method of sale or
other disposition requested by Union Bankshares. Union Bankshares shall provide
all information reasonably requested by Mid-Coast for inclusion in any
registration statement to be filed hereunder. Mid-Coast will use its reasonable
best efforts to cause such registration statement first to become effective and
then to remain effective for such period not in excess of one year from the day
such registration statement first becomes effective as may be reasonably
necessary to effect such sales or other dispositions. The first registration
effected under this Section 7 shall be at Mid-Coast's expense except for
underwriting commissions and the fees and disbursements of Union Bankshares'
counsel attributable to the registration. A second registration may be requested
hereunder at Union Bankshares' expense. In no event shall Mid-Coast be required
to effect more than two registrations hereunder. If requested by Mid-Coast, in
connection with any such registration, Union Bankshares 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 a selling shareholder
in such underwriting agreements.
8. Certain Puts.
(a) Upon the occurrence of a Purchase Event that occurs prior to
termination of the Option, (i) at the request of Union Bankshares, delivered
while the Option (in whole or part) is exercisable, Mid-Coast shall repurchase
the Option from Union Bankshares at a price
5
<PAGE> 6
equal to (x) the amount by which (a) the market/offer price (as defined below)
exceeds (b) the Option exercise price, multiplied by (y) the number of shares
for which the Option may then be exercised; and (ii) at the request from time to
time of the owner of shares purchased pursuant to the Option, delivered while
the Option (in whole or part) is exercisable (or, if it has been fully
exercised, would have been exercisable had such exercise not been made),
Mid-Coast shall repurchase such number of the shares issued pursuant to the
Option from the owner as the owner shall designate at a price equal to the
market/offer price multiplied by the number of such shares so designated. The
term "market/offer price" shall mean the highest of (i) the price per share of
Mid-Coast Common Stock at which a tender offer or exchange offer therefor has
been made after the date hereof, (ii) the price per share of Mid-Coast Common
Stock to be paid by any third party pursuant to any merger, consolidation, share
exchange or other agreement with Mid-Coast entered into after the date hereof,
(iii) the average closing price for shares of Mid-Coast Common Stock within the
30-day period immediately preceding the date Union Bankshares gives notice of
the required repurchase of this Option or the owner gives notice of the required
repurchase of shares, as the case may be, or (iv) in the event of a sale of all
or substantially all of Mid-Coast's assets, the sum of the price paid in such
sale for such assets and the current market value of the remaining assets of
Mid-Coast as determined by a nationally recognized investment banking firm
selected by the parties (or by an arbitrator if they cannot agree) divided by
the number of shares of Mid-Coast 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 a nationally recognized investment banking firm
selected by the parties (or by an arbitrator if they cannot agree), and such
determination shall be conclusive and binding on all parties.
(b) Union Bankshares or the owner, as the case may be, may exercise its
right to require Mid-Coast to repurchase the Option and any shares pursuant to
this Section 8 by surrendering for such purpose to Mid-Coast, at its principal
office, this Option Agreement or certificates for the shares, as applicable,
accompanied by a written notice or notices stating that Union Bankshares or the
owner, as the case may be, elects to require Mid-Coast to repurchase the Option
and/or the shares in accordance with the provisions of this Section 8. As
promptly as practicable, and in any event within five (5) business days after
the surrender of the Option and/or certificates representing shares and the
receipt of such notice or notices relating thereto, Mid-Coast shall deliver or
cause to be delivered to Union Bankshares or the owner of the shares, the
applicable repurchase price therefor or the portion thereof that Mid-Coast is
not then prohibited from so delivering under applicable law and regulation.
(c) Mid-Coast hereby undertakes to use its best efforts to obtain all
required regulatory and legal consents and to file any required notices in order
to accomplish any repurchase contemplated by this Section 8. To the extent that
Mid-Coast is prohibited under applicable law or regulation from repurchasing the
Option and/or the shares in full, Mid-Coast shall immediately so notify Union
Bankshares and the owner, if applicable, and thereafter deliver or cause to be
delivered, from time to time, the portion of the repurchase price that it is no
longer prohibited from delivering. If Mid-Coast at any time after delivery of a
notice of repurchase pursuant to Section 8 is prohibited under applicable law or
regulation from delivering the repurchase price in full (and Mid-Coast hereby
undertakes to use its best efforts to obtain all required regulatory and legal
approvals and to file any required notices as promptly as practicable in order
to accomplish such repurchase), Union Bankshares and/or the owner may revoke its
notice of repurchase either in whole or to the extent of the prohibition.
6
<PAGE> 7
9. Total Profit. Notwithstanding any other provision of this Option
Agreement to the contrary, in no event shall Union Bankshares' Total Profit (as
defined below) exceed $800,000 and, if it otherwise would exceed such amount,
Union Bankshares, at its sole election, shall either (A) reduce any remaining
shares of Mid-Coast Common Stock subject to the Option, (B) deliver to Mid-Coast
for cancellation without consideration shares of Mid-Coast Common Stock
previously purchased by Union Bankshares pursuant to the exercise of the Option,
(C) pay cash to Mid-Coast, (D) increase the per share exercise price, or (E) any
combination of the foregoing, so that Union Bankshares' actually realized Total
Profit shall not exceed $800,000 after taking into account the foregoing
actions.
As used in this Option Agreement, the term "Total Profit" shall mean
the aggregate sum (prior to the payment of taxes) of the following: (i) any net
cash amounts received by Union Bankshares pursuant to the sale of shares of
Mid-Coast Common Stock received pursuant to the exercise of the Option (or any
other securities into which such shares shall be converted or exchanged) to any
unaffiliated person less Union Bankshares' purchase price of such shares, (ii)
any amount received by Union Bankshares pursuant to Mid-Coast's repurchase of
shares of Mid-Coast Common Stock received pursuant to the exercise of the Option
less Union Bankshares' purchase price of such shares, and (iii) any amount
received by Union Bankshares' pursuant to Mid-Coast's repurchase of the Option
(or any portion thereof).
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 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 Mid-Coast Common Stock provided in Section 2 hereof (as
adjusted pursuant to Section 6 hereof), it is the express intention of Mid-Coast
to allow the holder to acquire or to require Mid-Coast to repurchase such lesser
number of shares as may be permissible, without any amendment or modification
hereof.
11. Miscellaneous.
(a) Extension. The period for exercise by Union Bankshares and its
assignees of any rights under this Option Agreement shall be extended (i) to the
extent necessary to obtain all regulatory approvals for the exercise of such
rights, and for the expiration of all statutory waiting periods; and (ii) to the
extent necessary to avoid liability under Section 16(b) of the 1934 Act by
reason of such exercise.
(b) Consents. Each of Union Bankshares and Mid-Coast will use its best
efforts to make all filings with, and to obtain consents of, all third parties
and regulatory authorities necessary to the consummation of the transactions
contemplated by this Option Agreement, including without limitation applying to
the FRB and the Maine Bureau of Banking for approval to acquire the shares
issuable hereunder.
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<PAGE> 8
(c) Expenses. Except as otherwise expressly provided herein or in the
Merger Agreement 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.
(d) Entire Agreement. Except as otherwise expressly provided herein or
in the Merger Agreement, this Option Agreement contains the entire agreement
between the parties with respect to the transactions contemplated hereunder and
supersedes all prior agreements 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 hereof, 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.
(e) 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.
(f) 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 follows:
Mid-Coast
Mid-Coast Bancorp, Inc.
1768 Atlantic Highway
Waldoboro, Maine 04572
Attn: Wesley E. Richardson
Fax Number: (207) 832-7516
Copy to: Richard Schaberg, Esq.
Thacher Proffitt & Wood
1700 Pennsylvania Avenue, N.W.
Washington, DC 20006
Fax Number: (202) 347-6238
Union Bankshares
Union Bankshares Co.
66 Main Street
P. O. Box 479
Ellsworth, Maine 04605
Attn: Peter A. Blyberg
Fax Number: (207) 667-2865
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<PAGE> 9
Copy to: Kenneth F. Ehrlich, Esq.
Peabody & Arnold, LLP
50 Rowes Wharf
Boston, Massachusetts 02110
Fax Number: (617) 951-2125
A party may change its address for notice purposes by written notice to the
other party hereto.
(g) 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.
(h) 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.
(i) Governing Law. This Option Agreement shall be governed by and
construed in accordance with the laws of the State of Maine applicable to
agreements made and entirely to be performed within such state, and such federal
laws as may be applicable.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, each of the parties hereto has executed this Option
Agreement as of the day and year first written above.
MID-COAST BANCORP, INC.
By: /s/ Peter A. Blyberg
-------------------------------------
Name: Peter A. Blyberg
Title: President
Attest:
/s/ Sally Hutchins
- ----------------------------
UNION BANKSHARES COMPANY
By: /s/ Wesley E. Richardson
-------------------------------------
Name: Wesley E. Richardson
Title: President
Attest:
/s/ Samuel Cohen
- ----------------------------
10
<PAGE> 1
EXHIBIT 99.1
March 28, 2000
FOR IMMEDIATE RELEASE
For more information, contact:
UNION BANKSHARES COMPANY MID-COAST BANCORP, INC.
Peter A. Blyberg Wesley E. Richardson
800-432-1592 -or- 207-667-2504 800-540-5363 -or- 207-832-7521
UNION BANKSHARES COMPANY ANNOUNCES PLANS
TO ACQUIRE MID-COAST BANCORP, INC.
Ellsworth, Maine, March 28, 2000: Union Bankshares Company ("Union")
(www.uniontrust.com) announced that it has signed a definitive agreement to
acquire Mid-Coast Bancorp, Inc. (NASDAQ: MCBN) (www.waldoborobank.com) and its
wholly-owned subsidiary, The Waldoboro Bank, F.S.B. ("Waldoboro"), a
federally-chartered savings bank headquartered in Waldoboro, Maine with assets
of $82.0 million. Under the terms of the agreement, Waldoboro will be merged
into Union's subsidiary bank, Union Trust Company ("Union Trust") and
Waldoboro's four offices, in Waldoboro, Rockland, Belfast and Jefferson, will
operate as branches of Union Trust.
Under the terms of the agreement, which was approved by the Boards of Directors
of both Union and MCBN, MCBN shareholders will receive $15.875 in cash for each
share of MCBN common stock, for a total transaction cost of approximately $11.9
million. Based on Monday's closing price of $6.00 per share of MCBN common
stock, this price represents a market premium of 165%.
In accordance with the agreement, MCBN granted Union an option to acquire, under
certain terms and conditions, up to 19.9% of MCBN's common stock at $6.00 per
share. The option was granted as an inducement for Union to enter into the
agreement.
This transaction, which is subject to shareholder and regulatory approvals, is
expected to close during the third quarter of 2000. Following consummation of
the transaction, Peter A. Blyberg, President and Chief Executive Officer of
Union and Union Trust will become President and Chief Executive Officer of the
combined institutions.
"Union Trust and Waldoboro are ideal partners," commented Mr. Blyberg. "We are
both customer-focused community banks with excellent track records of serving
down east and mid-coast Maine. We share the same values and commitment to our
customers, communities, employees and shareholders. Union Trust will benefit by
the expansion of our franchise to the mid-coast markets where Waldoboro has been
so successful and we look forward to bringing new products and services to
Waldoboro's customers. In fact, this is a great combination of people,
technology and capital, all focused on providing outstanding customer service
AND more value to our shareholders."
<PAGE> 2
Mr. Richardson stated, "We are extremely pleased to join Union Trust. Union
Trust is an excellent, highly profitable Maine community bank, with a solid
reputation, over 100 years' experience serving the financial needs of Maine
families, businesses and communities and an outstanding array of complementary
products and services. We will now be able to offer our customers an expanded
line of commercial, trust and investment services that will help them to meet
their financial goals. Together, we will continue to expand community banking in
eastern Maine and deliver personalized customer service and an ever-expanding
range of innovative financial products to our customers."
Mr. Blyberg added, "We also welcome the Waldoboro employees to the Union Trust
team. Their skills and knowledge are a definite plus for this combination."
Union Bankshares Company is a one-bank holding company, organized under the laws
of the State of Maine, with one subsidiary, Union Trust Company, which was
organized in 1887 and headquartered in Ellsworth, Maine. Union Trust Company
operates 11 banking offices in eastern Maine. Mid-Coast Bancorp, Inc. is the
holding company for The Waldoboro Bank, F.S.B., chartered in 1891. The Waldoboro
Bank, F.S.B. operates 4 banking offices in mid-coast Maine.
# # #
This press release contains certain statements that are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Reliance should not be placed on forward-looking statements because they involve
unknown risks, uncertainties and other factors which are, in some cases, beyond
the control of Union Bankshares Company or Mid-Coast Bancorp, Inc., as the case
may be. Actual events, performance and results could differ materially from the
anticipated event, performance or results expressed or implied in such
forward-looking statements. The factors which may cause such differences
include, among other factors, the ability of the parties to consummate the
transactions contemplated by the Agreement, conditions imposed on the
consummation of such transactions by regulatory agencies, the competitive
environment and general economic conditions.
Investors and security holders are advised to read the proxy statement and
other documents related to the Union and MCBN merger when they become available
and any amendments to these documents when they become available because they
will contain important information. Investors and security holders may obtain
these documents free of charge, when available, and other documents filed by
Union or MCBN with the Securities and Exchange Commission at the SEC's Internet
web site (www.sec.gov) and these documents may be obtained for free, in the
case of Union, from Union by directing such request to Union Bankshares, Inc.,
66 Main Street, P.O. Box 479, Ellsworth, Maine, 04605-1987, telephone
800-432-1592 -or- 207-667-2504 and in the case of MCBN, from MCBN by directing
such request to Mid-Coast Bancorp, Inc., 1768 Atlantic Highway, P.O. Box 589,
Waldoboro, Maine 04572, telephone 207-832-7521.
Union and MCBN and their respective directors intend to solicit proxies from
Union and MCBN shareholders in favor of the merger. The names of the directors
of Union and information regarding their
<PAGE> 3
security holdings may be obtained for free from Union by directing such request
to Union Bankshares, Inc., 66 Main Street, P.O. Box 479, Ellsworth, Maine,
04605-1987, telephone 800-432-1592 -or- 207-667-2504. The names of the
directors of MCBN and information regarding their security holdings may be
obtained for free from MCBN by directing such request to Mid-Coast Bancorp,
Inc., 1768 Atlantic Highway, P.O. Box 589, Waldoboro, Maine 04572, telephone
207-832-7521.
