SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): July 27, 1999
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CAMDEN NATIONAL CORPORATION
(Exact name of Registrant as specified in charter)
Maine 01-28190 01-0413282
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(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
Two Elm Street, Camden, Maine 04843
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(Address of principal executive offices) (Zip Code)
(207) 236-8821
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(Registrant's telephone number, including area code)
Item 5 - Other Events
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On July 27, 1999, Camden National Corporation, a Maine corporation
(the "Company"), Camden Acquisition Subsidiary, Inc., a Delaware corporation
and wholly-owned subsidiary of the Company, KSB Bancorp Inc., a Delaware
corporation ("KSB") and Kingfield Savings Bank, a Maine-chartered savings bank
and wholly owned subsidiary of KSB entered into an Agreement and Plan of Merger
(the "Merger Agreement"). The Merger Agreement provides for a series of related
transactions pursuant to which KSB will be merged with and into the Company
(the "Merger"), with the Company being the surviving corporation. The Boards
of Directors of the Company and KSB approved the Merger Agreement, and all of
the transactions contemplated thereby, at their respective meetings held on
July 27, 1999. The consummation of the Merger is subject to certain customary
conditions, including, without limitation, the approval of the stockholders of
each of the Company and KSB and certain regulatory approvals.
Under the Merger Agreement, at the Effective Time (as such term is
defined in the Merger Agreement), each outstanding share of common stock, par
value $0.01 per share, of KSB (the "KSB Common Stock") will be converted into
the right to receive 1.136 shares of the Company's common stock, no par value
(the "Camden Common Stock"). Each holder of KSB Common Stock who would
otherwise be entitled to receive a fractional share of Camden Common Stock
will receive cash in lieu thereof. The Merger is intended to constitute a
reorganization under Section 368(a) of the Internal Revenue Code of 1986, as
amended, and to be accounted for as a pooling-of-interests.
A copy of the Merger Agreement is attached hereto as Exhibit 2.1
and is incorporated herein by reference, and a copy of the Joint Press Release
issued by the Company and KSB regarding the Merger is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
In connection with the execution of the Merger Agreement, the
Company and KSB entered into a Stock Option Agreement, dated as of July 27,
1999, pursuant to which KSB granted the Company an option to purchase, subject
to certain terms and conditions contained therein, up to an aggregate of 19.9%
of the outstanding shares of KSB Common Stock. The option was granted as an
inducement to Camden's willingness to enter into the Merger Agreement. A
copy of the Stock Option Agreement is attached hereto as Exhibit 10.1 and is
incorporated herein by reference.
Item 7 - Financial Statements, Pro Forma Financial Information and Exhibits
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2.1 Agreement and Plan of Merger, dated as of July 27, 1999, by and
between Camden National Corporation, Camden Acquisition Subsidiary, Inc.
KSB Bancorp, Inc. and Kingfield Savings Bank.
10.1 Stock Option Agreement, dated as of July 27, 1999, by and between
KSB Bancorp, Inc. and Camden National Corporation.
99.1 Text of Joint Press Release issued by Camden National Corporation and KSB
Bancorp, Inc. on July 27, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Company has duly caused this report to be filed on its
behalf by the undersigned thereunto duly authorized.
CAMDEN NATIONAL CORPORATION
Dated: July 27, 1999 By: s/ Robert W. Daigle
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Name: Robert W. Daigle
Title: President &
Chief Executive Officer
EXHIBIT INDEX
Exhibit No. Description
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2.1 Agreement and Plan of Merger, dated as of July 27, 1999, by and
between Camden National Corporation, Camden Acquisition Subsidiary,
Inc., KSB Bancorp, Inc. and Kingfield Savings Bank
10.1 Stock Option Agreement, dated as of July 27, 1999, by and between
KSB Bancorp, Inc. and Camden National Corporation.
99.1 Text of Joint Press Release issued by Camden National Corporation and
KSB Bancorp, Inc. on July 27, 1999.
AGREEMENT AND PLAN OF MERGER
by and among
CAMDEN NATIONAL CORPORATION,
CAMDEN ACQUISITION SUBSIDIARY, INC.,
KSB BANCORP, INC.,
and
KINGFIELD SAVINGS BANK
Dated as of July 27, 1999
TABLE OF CONTENTS
Page
ARTICLE I - CERTAIN DEFINITIONS. . . . . . . . . . . . . . . . . . . . . .1
1.1 Certain Definitions. . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II - THE MERGER; EFFECTS OF THE MERGER . . . . . . . . . . . . . .8
2.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . .8
2.2 Charter and Bylaws . . . . . . . . . . . . . . . . . . . . . . .8
2.3 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
2.4 Effectiveness and Effects of the Merger. . . . . . . . . . . . .9
2.5 Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . .9
2.6 Accounting Treatment . . . . . . . . . . . . . . . . . . . . . .9
2.7 Board of Directors . . . . . . . . . . . . . . . . . . . . . . .9
ARTICLE III - MERGER CONSIDERATION; EXCHANGE PROCEDURES. . . . . . . . . 10
3.1 Merger Consideration . . . . . . . . . . . . . . . . . . . . . 10
3.2 Rights as Stockholders; Stock Transfers. . . . . . . . . . . . 10
3.3 Fractional Shares. . . . . . . . . . . . . . . . . . . . . . . 10
3.4 Exchange Procedures. . . . . . . . . . . . . . . . . . . . . . 11
3.5 Anti-Dilution Provisions . . . . . . . . . . . . . . . . . . . 12
3.6 Treasury Shares. . . . . . . . . . . . . . . . . . . . . . . . 12
3.7 Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV - THE SUBSEQUENT MERGER; EFFECTS OF THE
SUBSEQUENT MERGER . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.1 Subsequent Merger. . . . . . . . . . . . . . . . . . . . . . . 13
4.2 Charter. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.3 Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.4 Board of Directors . . . . . . . . . . . . . . . . . . . . . . 14
4.5 Cancellation of Shares . . . . . . . . . . . . . . . . . . . . 14
ARTICLE V - REPRESENTATIONS AND WARRANTIES
OF KSB AND THE BANK . . . . . . . . . . . . . . . . . . . . . . . . 14
5.1 Organization and Qualification; Subsidiaries . . . . . . . . . 14
5.2 Certificate of Incorporation; By-Laws; Corporate Records . . . 15
5.3 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 15
5.4 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.5 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.6 Consents and Approvals . . . . . . . . . . . . . . . . . . . . 17
5.7 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.8 SEC Reports and Bank Reports . . . . . . . . . . . . . . . . . 18
5.9 Financial Statements . . . . . . . . . . . . . . . . . . . . . 19
5.10 Absence of Certain Changes or Events . . . . . . . . . . . . . 20
5.11 Absence of Litigation. . . . . . . . . . . . . . . . . . . . . 22
5.12 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . 22
5.13 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . 23
5.14 Property and Leases. . . . . . . . . . . . . . . . . . . . . . 24
5.15 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.16 Certain Contracts. . . . . . . . . . . . . . . . . . . . . . . 26
5.17 Loan Portfolio . . . . . . . . . . . . . . . . . . . . . . . . 27
5.18 Investment Securities. . . . . . . . . . . . . . . . . . . . . 27
5.19 Derivative Transactions. . . . . . . . . . . . . . . . . . . . 28
5.20 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.21 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 29
5.22 Intellectual Property. . . . . . . . . . . . . . . . . . . . . 30
5.23 Administration of Fiduciary Accounts . . . . . . . . . . . . . 30
5.24 Agreements with Bank Regulators. . . . . . . . . . . . . . . . 31
5.25 Material Interests of Certain Persons. . . . . . . . . . . . . 31
5.26 Brokers Fees; Opinions. . . . . . . . . . . . . . . . . . . . 31
5.27 Joint Proxy Statement. . . . . . . . . . . . . . . . . . . . . 31
5.28 State Takeover Laws. . . . . . . . . . . . . . . . . . . . . . 32
5.29 Year 2000. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.30 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF CAMDEN AND CASI . . . . . 33
6.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . 33
6.2 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.3 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.4 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 34
6.5 Consents and Approvals . . . . . . . . . . . . . . . . . . . . 35
6.6 Joint Proxy Statement. . . . . . . . . . . . . . . . . . . . . 35
6.7 SEC Reports and Bank Reports . . . . . . . . . . . . . . . . . 35
6.8 Financial Statements . . . . . . . . . . . . . . . . . . . . 36
6.9 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.10 Absence of Certain Changes or Events . . . . . . . . . . . . . 37
6.11 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . 37
6.12 Environmental. . . . . . . . . . . . . . . . . . . . . . . . . 38
6.13 Agreements with Bank Regulators. . . . . . . . . . . . . . . . 39
6.14 Year 2000. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.15 Brokers Fees. . . . . . . . . . . . . . . . . . . . . . . . . 40
6.16 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VII - CONDUCT OF BUSINESS PENDING
THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.1 Covenants of KSB and the Bank. . . . . . . . . . . . . . . . . 41
7.2 Camden Products and Services . . . . . . . . . . . . . . . . . 45
7.3 System Conversions . . . . . . . . . . . . . . . . . . . . . . 45
7.4 Certain Changes and Adjustments. . . . . . . . . . . . . . . . 45
7.5 ALCO Management. . . . . . . . . . . . . . . . . . . . . . . . 46
7.6 Covenants of Camden. . . . . . . . . . . . . . . . . . . . . . 46
7.7 Affiliate Agreements . . . . . . . . . . . . . . . . . . . . . 46
7.8 Takeover Laws. . . . . . . . . . . . . . . . . . . . . . . . . 47
7.9 No Rights Triggered. . . . . . . . . . . . . . . . . . . . . . 47
7.10 Shares Listed. . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VIII - ADDITIONAL AGREEMENTS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.1 Stockholder Approvals. . . . . . . . . . . . . . . . . . . . . 47
8.2 Registration Statement . . . . . . . . . . . . . . . . . . . . 48
8.3 Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . 49
8.4 Access to Information. . . . . . . . . . . . . . . . . . . . . 50
8.5 No Solicitation. . . . . . . . . . . . . . . . . . . . . . . . 51
8.6 Employee Benefits Matters. . . . . . . . . . . . . . . . . . . 52
8.7 Directors' and Officers' Insurance . . . . . . . . . . . . . . 53
8.8 Financial and Other Statements . . . . . . . . . . . . . . . . 53
8.9 Further Action . . . . . . . . . . . . . . . . . . . . . . . . 54
8.10 Public Announcements . . . . . . . . . . . . . . . . . . . . . 54
8.11 Additional Agreements. . . . . . . . . . . . . . . . . . . . . 54
8.12 Update of Disclosure Schedules . . . . . . . . . . . . . . . . 55
8.13 Current Information. . . . . . . . . . . . . . . . . . . . . . 55
8.14 Bank Merger. . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.15 Post-Closing Governance. . . . . . . . . . . . . . . . . . . . 56
ARTICLE IX - CONDITIONS TO THE MERGER. . . . . . . . . . . . . . . . . . 57
9.1 Conditions to Each Party's Obligations to Effect the Merger. . 57
9.2 Conditions to Obligations of Camden and CASI . . . . . . . . . 58
ARTICLE X - TERMINATION, AMENDMENT AND WAIVER. . . . . . . . . . . . . . 60
10.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.2 Effect of Termination. . . . . . . . . . . . . . . . . . . . . 63
10.3 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . 65
10.4 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE XI - GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . 65
11.1 Alternative Structure. . . . . . . . . . . . . . . . . . . . . 65
11.2 Non-Survival of Representations, Warranties and Agreements . . 66
11.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 67
11.5 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 67
11.6 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 67
11.7 Parties in Interest. . . . . . . . . . . . . . . . . . . . . . 67
11.8 Specific Performance . . . . . . . . . . . . . . . . . . . . . 67
11.9 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 68
11.10 Headings. . . . . . . . . . . . . . . . . . . . . . . . . 68
11.11 Interpretation. . . . . . . . . . . . . . . . . . . . . . 68
11.12 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 68
EXHIBIT A-1 Form of Affiliate Letter to Camden
EXHIBIT A-2 Form of Affiliate Letter to KSB
EXHIBIT B Bank Holding Companies Index Group
EXHIBIT C Form of Bank Merger Agreement
EXHIBIT D Form of Voting Agreement
AGREEMENT AND PLAN OF MERGER, dated as of July 27, 1999 ( this
Agreement ), by and between CAMDEN NATIONAL CORPORATION, a Maine corporation
( Camden ), CAMDEN ACQUISITION SUBSIDIARY, INC., a Delaware corporation and
wholly owned subsidiary of Camden ( CASI ), which has been formed for the
specific and sole purpose of consummating the Merger (as such term is defined
below), KSB BANCORP, INC., a Delaware corporation ( KSB ), and KINGFIELD
SAVINGS BANK, a Maine-chartered savings bank and wholly owned subsidiary of
KSB (the Bank ).
WITNESSETH:
WHEREAS, the Boards of Directors of Camden, CASI and KSB have determined
that it is in the best interests of their respective corporations and their
stockholders to consummate the strategic business merger transactions provided
for herein, in which (i) CASI will, subject to the terms and conditions set
forth herein, merge (the Merger) with and into KSB such that KSB is the
surviving corporation in the Merger and continues its corporate existence under
the laws of the State of Delaware as a wholly owned subsidiary of Camden, and
(ii) KSB (as the surviving corporation from the Merger) will, subject to the
terms and conditions set forth herein, merge (the Subsequent Merger, and
together with the Merger, the Mergers) with and into Camden such that Camden is
the surviving corporation in the Subsequent Merger and continues its corporate
existence under the laws of the State of Maine;
WHEREAS, in connection with the execution of this Agreement, KSB and
Camden are entering into a stock option agreement, with KSB as issuer and
Camden as grantee (the KSB Option Agreement); and
WHEREAS, the parties desire to make certain representations, warranties
and agreements in connection with the Mergers and also to prescribe certain
conditions to the Mergers;
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE I - CERTAIN DEFINITIONS
1.1 Certain Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:
Affiliate shall have the meaning set forth in Section 7.7(a).
Agreement shall have the meaning set forth in the preamble to this
Agreement.
AMEX shall mean The American Stock Exchange.
Bank Board shall have the meaning set forth in Section 5.4(b).
Bank Common Stock shall have the meaning set forth in Section 5.3(b).
Bank Examinations shall have the meaning set forth in Section 5.8(b).
Bank Meeting shall have the meaning set forth in Section 8.1.
Bank Merger shall have the meaning set forth in Section 8.14.
Bank Merger Agreements shall have the same meaning set forth in
Section 8.14.
Bank Regulators shall have the meaning set forth in Section 5.8(b).
Bank Shares shall have the meaning set forth in Section 5.3(b).
BHCA shall have the meaning set forth in Section 5.1(a).
Burdensome Condition shall have the meaning set forth in Section 9.2(d).
Business Day shall mean any day on which the principal offices of the
SEC in Washington, D.C. is open to accept filings, or, in the case of
determining a date when any payment is due, any day on which banks are
not required or authorized to close in the City of Augusta, Maine.
Camden shall have the meaning set forth in the preamble to this
Agreement.
Camden Common Stock shall have the meaning set forth in Section 3.1(a).
Camden ERISA Affiliate shall have the meaning set forth in Section 6.11.
Camden Floor Price shall have the meaning set forth in Section 10.1(i).
Camden Index Ratio shall have the meaning set forth in Section 10.1(i).
Camden Meeting shall have the meaning set forth in Section 8.1.
Camden National Bank shall mean Camden National Bank, a wholly-owned
subsidiary of Camden and a bank organized under the laws of the United
States.
Camden Plans shall have the meaning set forth in Section 6.11(a).
Camden Ratio shall have the meaning set forth in Section 10.1(i).
Camden SEC Reports shall have the meaning set forth in Section 6.7.
CASI shall have the meaning set forth in the preamble to this Agreement.
CASI Common Stock shall have the meaning set forth in Section 3.1(b).
CASI Meeting shall have the meaning set forth in the Section 8.1.
Certificate of Merger shall have the meaning set forth in Section 2.1.
Closing shall have the meaning set forth in Section 2.3.
Closing Date shall have the meaning set forth in Section 2.3.
COBRA shall have the meaning set forth in Section 5.12(d).
Code shall have the meaning set forth in Section 5.15(b).
Confidentiality Agreement shall have the meaning set forth in
Section 8.4(a).
Control (including the terms controlled by and under common control
with) shall mean the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management
and policies of a person, whether through the ownership of voting
securities, as trustee or executor, by contract or credit arrangement
or otherwise;
CRA shall have the meaning set forth in Section 5.7.
DGCL shall mean the Delaware General Corporation Law.
Disclosure Schedule shall mean a schedule prepared by KSB and the Bank
or Camden and CASI, as applicable, setting forth, among other things,
items the disclosure of which is necessary or appropriate in relation
to any or all of their respective representations and warranties.
Effective Date shall have the meaning set forth in Section 2.4.
Effective Time shall have the meaning set forth in Section 2.4.
Environment shall have the meaning set forth in Section 5.21(f).
EPA shall have the meaning set forth in Section 5.21(a).
ERISA shall have the meaning set forth in Section 5.12(a).
ESOP shall have the meaning set forth in Section 5.12(c).
Exchange Act shall have the meaning set forth in Section 5.6(a).
Exchange Agent shall have the meaning set forth in Section 3.4(a).
Exchange Fund shall have the meaning set forth in Section 3.4(a).
Exchange Ratio shall have the meaning set forth in Section 3.1(a).
Expense Fee shall have the meaning set forth in Section 10.2(c).
Expenses shall have the meaning set forth in Section 10.2(b).
FDIA shall mean the Federal Deposit Insurance Act, as amended.
FDIC shall have the meaning set forth in Section 5.1(a).
FRB shall have the meaning set forth in Section 5.1(a).
GAAP shall have the meaning set forth in Section 2.6.
Governmental Entity shall have the meaning set forth in Section 5.6(a).
Hazardous Material shall have the meaning set forth in Section 5.21(f).
HSR Act shall have the meaning set forth in Section 5.6(a).
Information Technology means all computer software, computer hardware
(whether general or specific purpose) and other similar or related items
of automated, computerized, or software systems that are used or relied
on by KSB or the Bank in the conduct of their respective businesses.
Injunction shall have the meaning set forth in Section 9.1(c).
IRS shall have the meaning set forth in Section 5.15(a).
Joint Proxy Statement shall have the meaning set forth in Section 8.2(a).
Knowledge shall mean actual knowledge of all of the directors, executive
officers of KSB or the Bank who knew or should know as to the matters
referenced herein, and includes any facts, matters or circumstances set
forth in any written notice from any Governmental Entity or any other
material written notice received by KSB or the Bank, and also includes
any matter of which Camden informs KSB or the Bank in writing prior to
the date hereof or to which KSB or the Bank acknowledges or agrees.
KSB shall have the meaning set forth in the preamble to this Agreement.
KSB Board shall have the meaning set forth in Section 5.4(a).
KSB Common Stock shall have the meaning set forth in Section 3.1(a).
KSB Compensation and Benefit Plans shall mean the Compensation and
Benefit Plans of KSB.
KSB Contract shall have the meaning set forth in Section 5.16(a).
KSB Employees shall have the meaning set forth in Section 8.6(a).
KSB ERISA Affiliate shall have the meaning set forth in Section 5.12(a).
KSB Meeting shall have the meaning set forth in Section 8.1.
KSB Option Agreement shall have the meaning set forth in the preamble to
this Agreement.
KSB Preferred Stock shall have the meaning set forth in Section 5.3(a).
KSB SEC Reports shall have the meaning set forth in Section 5.8(a).
KSB Stock Option shall have the meaning set forth in Section 3.7(a).
KSB Stock Option Plans shall have the meaning set forth in
Section 3.7(a).
Liaison Committee shall have the meaning set forth in Section 8.13(a).
Liens shall have the meaning set forth in Section 5.14(a).
Loan Property shall have the meaning set forth in Section 5.21(f).
Loans shall have the meaning set forth in Section 5.17.
Maine Superintendent shall have the meaning set forth in Section 5.6(a).
Material Adverse Effect shall mean with respect to Camden or KSB,
respectively, any effect that (i) is material and adverse to the
financial position, results of operations, assets or business of
Camden and its Subsidiaries taken as a whole, or KSB and its Subsidiaries
taken as a whole, respectively, or (ii) would materially impair the
ability of Camden or KSB, respectively, to perform its obligations
under this Agreement or otherwise materially threaten or materially
impede the consummation of the Mergers, the Bank Merger and the other
transactions contemplated by this Agreement; provided, however, that
Material Adverse Effect shall not be deemed to include the impact of
(a) changes in banking, corporate and similar laws of general
applicability or interpretations thereof by courts or governmental
authorities, (b) changes in generally accepted accounting principles
or regulatory accounting requirements applicable to banks or savings
associations and their holding companies generally, (c) actions or
omissions of Camden or its Subsidiaries or KSB or its Subsidiaries
taken with the prior written consent of Camden or KSB, as applicable,
in contemplation of the transactions contemplated hereby, and (d) the
effects of the Mergers and compliance by either party with the provisions
of this Agreement on the financial position, results of operations,
assets or business of such party and its Subsidiaries, or the other
party and its Subsidiaries, as the case may be.
MBCA shall have the meaning set forth in Section 4.1.
Meeting shall have the meaning set forth in Section 8.1.
Merger shall have the meaning set forth in the recitals to this
Agreement.
Merger Consideration shall have the meaning set forth in Section 2.1.
Mergers shall have the meaning set forth in the recitals to this
Agreement.
New Certificates shall have the meaning set forth in Section 3.4(a).
OCC shall mean the Office of the Comptroller of the Currency.
Oil shall have the meaning set forth in Section 5.21(f).
Old Certificates shall have the meaning set forth in Section 3.4(a).
OREO shall have the meaning set forth in Section 5.9(a).
Participation Facility shall have the meaning set forth in
Section 5.21(a).
Permitted Liens shall have the meaning set forth in Section 5.14(a).
Person or person shall mean any individual, bank, corporation,
partnership, limited liability company, association, joint-stock company,
business trust or unincorporated organization.
Plans shall have the meaning set forth in Section 5.12(a).
Registration Statement shall have the meaning set forth in
Section 8.2(a).
Requisite Regulatory Approvals shall have the meaning set forth in
Section 9.1(b).
Rights shall mean, with respect to any person, securities or obligations
convertible into or exchangeable for, or giving any person any right to
subscribe for or acquire, or any options, calls or commitments relating
to, shares of stock of such person.
SEC shall have the meaning set forth in Section 5.8(a).
Securities Act shall have the meaning set forth in Section 5.8(a).
Starting Date shall have the meaning set forth in Section 10.1(i).
Subsequent Effective Time shall have the meaning set forth in
Section 4.1.
Subsequent Merger shall have the meaning set forth in the recitals to
this Agreement.
Subsidiary and Significant Subsidiary shall have the respective
meanings set forth in Rule 1-02 of Regulation S-X of the SEC.
Subsidiaries shall mean all of a party s Subsidiaries and Significant
Subsidiaries.
Surviving Corporation shall have the meaning set forth in Section 2.1.
Takeover Laws shall have the meaning set forth in Section 5.28.
Taxes shall have the meaning set forth in Section 5.15(c)
Treasury Shares shall have the meaning set forth in Section 3.1(a).
United Bank shall mean United Bank, a banking organization chartered
under the laws at the State of Maine and a wholly-owned Subsidiary of
Camden.
Year 2000 Compliant means that the Information Technology is designed to
be used prior to, during and after the calendar year 2000 A.D., and the
Information Technology used during each such time period will accurately
receive, provide and process date/time data (including calculating,
comparing and sequencing) from, into and between the 20th and 21st
centuries, including the years 1999 and 2000 and leap-year calculations,
and will not malfunction, cease to function, or provide invalid or
incorrect results as a result of date/time data, to the extent that any
other information technology, used in combination with the Information
Technology, properly exchanges date/time data with it.
Year 2000 Plan shall have the meaning set forth in Section 5.29.
Year 2000 Regulatory Requirements shall have the meaning set forth in
Section 5.29.
ARTICLE II - THE MERGER; EFFECTS OF THE MERGER
2.1 The Merger. At the Effective Time, upon the terms and subject to the
conditions of this Agreement, CASI shall merge with and into KSB, the separate
corporate existence of CASI shall cease and KSB shall survive and continue its
corporate existence under the laws of the State of Delaware as a wholly owned
subsidiary of Camden (KSB, as the surviving corporation in the Merger, being
sometimes referred to herein as the Surviving Corporation). The parties
shall prepare and execute a certificate of merger (the Certificate of Merger)
in order to comply in all respects with the requirements of the DGCL and with
the provisions of this Agreement. Camden may at any time change the method of
effecting the strategic business merger transactions with KSB and CASI provided
for herein (including without limitation the provisions of this Article II) if
and to the extent it deems such change to be desirable, including without
limitation to provide for a merger of KSB into Camden or a wholly owned
subsidiary of Camden; provided, however, that no such change shall (A) alter or
change the amount or kind of consideration to be issued to holders of KSB
Common Stock as provided for in this Agreement (the Merger Consideration), (B)
adversely affect the tax treatment of KSB s stockholders as a result of
receiving the Merger Consideration or (C) materially impede or delay
consummation of the Merger. KSB and CASI agree to, and to cause their
Subsidiaries to, appropriately amend this Agreement and any related documents
in order to reflect such revised method of effecting the strategic business
merger transactions with KSB and CASI provided for herein to the extent deemed
necessary or desirable by Camden in its reasonable judgment.
2.2 Charter and Bylaws. The Certificate of Merger shall provide that, at
the Effective Time, the charter of the Surviving Corporation shall be the
charter of CASI, as such charter may be amended, and set forth in the
Certificate of Merger or any certificate of amendment filed prior to the
Effective Time. The bylaws of the Surviving Corporation shall be the bylaws of
CASI at the Effective Time.
2.3 Closing. The closing of the Merger (the Closing ) will occur at
10:00 a.m., Boston time, on the date to be specified by the parties in
accordance with the terms of this Agreement (the Closing Date ), at the offices
of Goodwin, Procter & Hoar LLP, Exchange Place, Boston, Massachusetts 02109,
unless another date or place is agreed to in writing by the parties.
2.4 Effectiveness and Effects of the Merger. On the Closing Date, or at
such time as may otherwise be agreed by the parties, CASI and KSB shall execute
and file with the Secretary of State of the State of Delaware the Certificate
of Merger in accordance with the DGCL. Subject to the satisfaction or waiver
of the conditions set forth in Article VIII, the Merger shall become effective
(the Effective Time ) upon the occurrence of the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware pursuant to Section
252 of the DGCL, or such other time, if any, as may be specified in the
Certificate of Merger. The Merger shall have the effects prescribed in Sections
259 and 261 of the DGCL. The date on which the Effective Time occurs is
referred to herein as the Effective Date.
2.5 Tax Consequences. It is intended that both the Merger and the
Subsequent Merger be consummated pursuant to one integrated plan which
qualifies as a reorganization under Section 368(a)(1)(A) of the Code. This
Agreement shall constitute a plan of reorganization for purposes of Section
368 of the Code.
2.6 Accounting Treatment. It is intended that the Merger be accounted
for as a pooling of interests under generally accepted accounting principles
( GAAP ). The parties acknowledge and agree that (i) Camden intends to take
all measures it deems necessary to cause the transaction to be accounted for as
a pooling of interests transaction and (ii) neither such measures nor any
consequence or result thereof shall be deemed to have a Material Adverse Effect
for the purposes of this Agreement. It is further understood that in the event
that Camden determines in its sole discretion not to take such measures as to
achieve pooling of interests accounting treatment, accounting for the
transaction on a purchase accounting basis shall not be deemed to have a
Material Adverse Effect.
2.7 Board of Directors. At the Effective Time, the Board of Directors of
the Surviving Corporation shall be those persons serving as directors of CASI
immediately prior to the Effective Time, such persons to serve until the
earlier of their resignation or removal or until their respective successors
are duly appointed or elected and qualified, as the case may be.
ARTICLE III - MERGER CONSIDERATION; EXCHANGE PROCEDURES
3.1 Merger Consideration. Subject to the provisions of this Agreement,
at the Effective Time, automatically by virtue of the Merger and without any
action on the part of any party or stockholder:
(a) Outstanding KSB Common Stock. Each share (excluding shares held
by KSB or by Camden, other than in a fiduciary capacity ( Treasury Shares )) of
the common stock, par value $.01 per share, of KSB (the KSB Common Stock )
issued and outstanding immediately prior to the Effective Time shall be
converted into and become the right to receive 1.136 shares (subject to
adjustment as set forth herein, the Exchange Ratio ) of common stock, no par
value, of Camden (the Camden Common Stock ).
(b) Outstanding CASI Common Stock. Each share of the common stock,
par value $.01 per share, of CASI ( CASI Common Stock ) issued and outstanding
immediately prior to the Effective Time shall be converted into and become one
validly issued, fully paid and nonassessable share of the KSB Common Stock.
(c) Outstanding Camden Common Stock. Each share of Camden Common
Stock issued and outstanding immediately prior to the Effective Time shall
remain outstanding following the Effective Time.
3.2 Rights as Stockholders; Stock Transfers. At the Effective Time,
holders of KSB Common Stock shall cease to be, and shall have no rights as,
stockholders of KSB, other than to receive any dividend or other distribution
with respect to such KSB Common Stock with a record date occurring prior to the
Effective Time and to receive the Merger Consideration provided under this
Article III. After the Effective Time, there shall be no transfers on the
stock transfer books of KSB of shares of KSB Common Stock, other than transfers
of KSB Common Stock that have occurred prior to the Effective Time.
3.3 Fractional Shares. Notwithstanding any other provision hereof, no
fractional shares of Camden Common Stock and no certificates or scrip therefor,
or other evidence of ownership thereof, will be issued in the Merger; instead,
Camden shall pay to each holder of KSB Common Stock who would otherwise be
entitled to a fractional share of Camden Common Stock (after aggregating all
Old Certificates delivered by such holder) an amount in cash to be paid in lieu
of fractional shares (without interest) determined by multiplying such fraction
by the average of the last sale prices of Camden Common Stock, as reported by
the AMEX Composite Transactions reporting system (as reported in The Wall
Street Journal or, if not reported therein, in another authoritative source),
for the five AMEX trading days immediately preceding the Effective Date.
3.4 Exchange Procedures.
(a) Prior to the Effective Time, Camden shall deposit, or shall
cause to be deposited, with a bank or trust company selected by Camden and
reasonably acceptable to KSB (the Exchange Agent ), for the benefit of the
holders of certificates representing shares of KSB Common Stock immediately
prior to the Effective Time ( Old Certificates ), for exchange in accordance
with this Article III, certificates representing the shares of Camden Common
Stock ( New Certificates ) and an estimated amount of cash to be paid in lieu
of fractional shares (such cash and New Certificates, together with any
dividends or distributions with respect thereto (without any interest thereon),
being hereinafter referred to as the Exchange Fund ) to be paid pursuant to
this Article III in exchange for outstanding shares of KSB Common Stock.
(b) As promptly as practicable after the Effective Time, and in any
event within seven business days thereafter, Camden shall send or cause to be
sent to each holder of record of shares (other than Treasury Shares) of KSB
Common Stock immediately prior to the Effective Time transmittal materials for
use in exchanging such stockholder's Old Certificates for the consideration set
forth in this Article III. Camden shall cause the New Certificates, into which
shares of a stockholder s KSB Common Stock are convertible from and after the
Effective Time, and/or any check in respect of any fractional share interests
or dividends or distributions which such person shall be entitled to receive,
to be delivered to such stockholder upon delivery to the Exchange Agent of Old
Certificates representing such shares of KSB Common Stock (or indemnity
reasonably satisfactory to Camden and the Exchange Agent, if any of such
certificates are lost, stolen or destroyed) owned by such stockholder. No
interest will be paid on any such cash to be paid pursuant to this Article III
upon such delivery.
(c) Notwithstanding the foregoing, neither the Exchange Agent nor
any party hereto or any affiliate thereof shall be liable to any former holder
of KSB Common Stock for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws.
(d) No dividends or other distributions with respect to Camden
Common Stock with a record date occurring after the Effective Time shall be
paid to the holder of any unsurrendered Old Certificate representing shares of
KSB Common Stock converted in the Merger into the right to receive shares of
such Camden Common Stock until the holder thereof shall surrender such Old
Certificate, together with the necessary transmittal materials, in accordance
with this Article III. Subject to applicable law, after the surrender of an
Old Certificate in accordance with this Article III, the record holder thereof
shall be entitled to receive any such dividends or other distributions, without
any interest thereon, which theretofore had become payable with respect to
shares of Camden Common Stock for which such Old Certificate was exchangeable.
(e) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of KSB for twelve (12) months after the Effective Time shall be
paid to Camden, subject to the rights of such stockholders to receive payments
from any such portion of the Exchange Fund in accordance with the terms of this
Article III. Any stockholders of KSB who have not theretofore complied with
this Article III shall thereafter look only to Camden for payment of the shares
of Camden Common Stock, cash in lieu of any fractional shares and unpaid
dividends and distributions on the Camden Common Stock deliverable in respect
of each share of KSB Common Stock such stockholder holds as determined pursuant
to this Agreement, in each case, without any interest thereon.
3.5 Anti-Dilution Provisions. In the event Camden or KSB changes (or
establishes a record date for changing) the number of, or provides for the
exchange of, shares of Camden Common Stock or KSB Common Stock issued and
outstanding prior to the Effective Date as a result of a stock split, stock
dividend, recapitalization, reclassification, reorganization or similar
transaction with respect to the outstanding Camden Common Stock or KSB Common
Stock and the record date therefor shall be prior to the Effective Date, the
Exchange Ratio shall be proportionately and appropriately adjusted.
By way of illustration, if Camden shall declare a stock dividend of 10%
payable with respect to a record date on or prior to the Effective Date, the
Exchange Ratio shall be adjusted upward by 10% and shall be equal to 1.250.
3.6 Treasury Shares. Each of the shares of KSB Common Stock constituting
Treasury Shares immediately prior to the Effective Time shall be canceled and
retired at the Effective Time and no consideration shall be issued in exchange
therefor.
3.7 Options.
(a) At the Effective Time, all employee and director stock options
to purchase shares of KSB Common Stock (each, a KSB Stock Option ), which are
then outstanding and unexercised, shall cease to represent a right to acquire
shares of KSB Common Stock, and shall be converted automatically into options
to purchase shares of Camden Common Stock, and Camden shall assume each such
KSB Stock Option subject to the terms of any of the stock option plans listed
under Stock Plans in Section 3.7 of KSB s Disclosure Schedule (collectively,
the KSB Stock Option Plans ), and the agreements evidencing grants thereunder;
provided, however, that from and after the Effective Time, (i) the number of
shares of Camden Common Stock purchasable upon exercise of any such KSB Stock
Option shall be equal to the number of shares of KSB Common Stock that were
purchasable under such KSB Stock Option immediately prior to the Effective Time
multiplied by the Exchange Ratio, rounding to the nearest whole share (with .5
being rounded up), and (ii) the per share exercise price under each such KSB
Stock Option shall be adjusted by dividing the per share exercise price of
each such KSB Stock Option by the Exchange Ratio, rounding to the nearest cent.
The terms of each KSB Stock Option shall, in accordance with its terms, be
subject to further adjustment as appropriate to reflect any stock split, stock
dividend, recapitalization or other similar transaction with respect to Camden
Common Stock on or subsequent to the Effective Date. Notwithstanding the
foregoing, the number of shares and the per share exercise price of each KSB
Stock Option which is intended to be an incentive stock option (as defined
in Section 422 of the Code) shall be adjusted in accordance with the
requirements of Section 424(a) of the Code. Accordingly, with respect to any
incentive stock options, fractional shares shall be rounded down to the nearest
whole number of shares and where necessary the per share exercise price shall
be rounded up to the nearest cent.
(b) At or prior to the Effective Time, Camden shall reserve for
issuance the number of shares of Camden Common Stock necessary to satisfy
Camden s obligations under Section 3.7(a). At the Effective Time, or as soon
as practicable thereafter, and in any event within fifteen business days
thereafter, Camden shall file with the SEC a registration statement on Form S-8
or other appropriate form under the Securities Act with respect to the shares
of Camden Common Stock subject to options to acquire Camden Common Stock issued
pursuant to Section 3.7(a) hereof, and shall use its best efforts to maintain
the current status of the prospectus contained therein, as well as comply with
any applicable state securities or blue sky laws, for so long as such options
remain outstanding.
ARTICLE IV - THE SUBSEQUENT MERGER; EFFECTS OF THE
SUBSEQUENT MERGER
4.1 Subsequent Merger. As soon as practicable following the Effective
Time, Camden shall, and it shall cause KSB (as the Surviving Corporation in
the Merger) to, effect the Subsequent Merger by executing and filing (i)
articles of merger with the Secretary of State of the State of Maine pursuant
to the Maine Business Corporation Act (Title 13-A) (the MBCA ) and (ii) a
certificate of merger with the Secretary of State of the State of Delaware
pursuant to the DGCL. The Subsequent Merger shall become effective at the
time (the Subsequent Effective Time ) specified in both (i) the articles of
merger filed with the Secretary of State of the State of Maine pursuant to
Section 904 of the MBCA and (ii) the certificate of merger filed with the
Secretary of State of the State of Delaware pursuant to Section 252 of the
DGCL. As a result of the Subsequent Merger, the separate corporate
existence of KSB shall cease and Camden shall be the surviving corporation and
continue its corporate existence under the laws of the State of Maine. The
Subsequent Merger shall have the effects prescribed in Section 905 of the MBCA
and Sections 259 and 261 of the DGCL.
4.2 Charter. The charter of the surviving corporation from the
Subsequent Merger shall be the charter of Camden immediately prior to the
Subsequent Effective Time.
4.3 Bylaws. The bylaws of the surviving corporation from the Subsequent
Merger shall be the bylaws of Camden immediately prior to the Subsequent
Effective Time.
4.4 Board of Directors. At the Subsequent Effective Time, the Board of
Directors of the surviving corporation shall be those persons serving as
directors of Camden immediately prior to the Subsequent Effective Time, as
constituted in accordance with Section 8.15 hereof, such persons to serve
until the earlier of their resignation or removal or until their respective
successors are duly appointed or elected and qualified, as the case may be.
4.5 Cancellation of Shares. Each share of KSB Common Stock issued and
outstanding immediately prior to the Subsequent Effective Time shall, by
virtue of the Subsequent Merger and without any action on the part of Camden,
be canceled without receipt of any consideration thereof by Camden.
ARTICLE V - REPRESENTATIONS AND WARRANTIES
OF KSB AND THE BANK
KSB and the Bank hereby jointly and severally represent and warrant to
Camden and CASI that:
5.1 Organization and Qualification; Subsidiaries.
(a) KSB is a corporation duly organized, validly existing and in
good standing under the DGCL and a bank holding company registered with the
Board of Governors of the Federal Reserve System (the "FRB") under the Bank
Holding Company Act of 1956, as amended (the "BHCA"). The Bank is a state
chartered savings bank duly organized, validly existing and in good standing
under the laws of the State of Maine. The deposit accounts of the Bank are
insured by the Federal Deposit Insurance Corporation (the "FDIC") to the
fullest extent permitted by law and all premiums and assessments required in
connection therewith have been paid by the Bank. Each of KSB and the Bank
has the requisite power and authority and all necessary governmental approvals
to own, lease and operate all of its properties and assets and to carry on its
business as it is now being conducted, and is duly licensed or qualified to do
business and is in good standing in each jurisdiction where 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 be in
good standing would not, either individually or in the aggregate, have a
Material Adverse Effect.
(b) Except for the Bank, KSB does not have any Subsidiaries or
directly or indirectly own five percent or more of the capital stock or other
equity or similar interest in, or any interest convertible into or exchangeable
or exercisable for, any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity.
5.2 Certificate of Incorporation; By-Laws; Corporate Records. KSB and
the Bank each has heretofore made available to Camden a complete and correct
copy of the Certificate of Incorporation and the By-Laws or equivalent
organizational documents, each as amended to date, of KSB and the Bank. Such
Certificate of Incorporation, By-Laws and equivalent organizational documents
are in full force and effect. Neither KSB nor the Bank is in violation
of any provision of its Certificate of Incorporation or equivalent
organizational documents or of its By-Laws. The minute books of KSB and the
Bank contain in all material respects true and complete records of all meetings
held and true and complete records of all corporate actions taken of their
respective stockholders and boards of directors (including committees of
their respective boards of directors).
5.3 Capitalization.
(a) The authorized capital stock of KSB consists of 2,400,000 shares
of KSB Common Stock and 200,000 shares of authorized but unissued preferred
stock, $.01 par value per share (the "KSB Preferred Stock"). As of the date
hereof, (a) 1,321,265 shares of KSB Common Stock are issued and outstanding,
all of which are duly authorized, validly issued, fully paid, nonassessable and
free of preemptive rights, with no personal liability attaching to the
ownership thereof, (b) 20,404 shares of KSB Common Stock are held in the
treasury of KSB, (c) no shares of KSB Common Stock are held by any of its
subsidiaries, (d) 94,108 shares of KSB Common Stock are reserved for future
issuance pursuant to KSB Stock Option Plans, and (e) 262,932 shares of KSB
Common Stock are reserved for future issuance pursuant to the KSB Option
Agreement. As of the date hereof, no shares of KSB Preferred Stock are
issued and outstanding. All shares of KSB Common Stock subject to issuance
as aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights, with
no personal liability attaching to the ownership thereof.
(b) The authorized capital stock of the Bank consists of 1,000
shares of Common Stock, par value $1.00 per share ("Bank Common Stock")
(shares of Bank Common Stock being hereinafter collectively referred to as
"Bank Shares"). As of the date hereof, (a) 1,000 Bank Shares are issued and
outstanding and owned by KSB, all of which are duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof and (b) no Bank Shares
are held in the treasury of the Bank, and (c) no Bank Shares are held by any
other person.
(c) Except for KSB Stock Option Plans and the KSB Option Agreement,
there are no outstanding subscriptions, options, warrants, calls or other
rights, agreements, arrangements or commitments of any character relating to
the issued or unissued capital stock of KSB or the Bank or obligating KSB or
the Bank to issue or sell any shares of capital stock of, or other equity
interests in, KSB or the Bank. There are no outstanding contractual
obligations of KSB or the Bank to repurchase, redeem or otherwise acquire any
shares of capital stock of, or other equity interests in, KSB or the Bank. The
names of the optionees, the date of each option to purchase shares of KSB
Common Stock granted, the number of shares subject to each such option, the
expiration date of each such option, and the price at which each such option
may be exercised under KSB Stock Option Plans are set forth in Section 5.3
of the Disclosure Schedule
5.4 Authority.
(a) KSB has full corporate power and authority to execute and
deliver this Agreement and the KSB Option Agreement, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the KSB Option Agreement, the performance of its obligations hereunder and
the consummation of the transactions contemplated hereby and thereby have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of KSB are necessary to authorize this
Agreement and the KSB Option Agreement or the performance of its obligations
hereunder and thereunder or to consummate the transactions contemplated hereby
(other than, with respect to the Merger, the approval and adoption of this
Agreement by the holders of the then outstanding shares of KSB Common Stock)
and thereby. The Board of Directors of KSB (the KSB Board ) has approved this
Agreement by unanimous vote and has directed that this Agreement and the
transactions contemplated hereby, including the Merger, be submitted to KSB
s stockholders for approval at a meeting of such stockholders. This Agreement
has been duly and validly executed and delivered by KSB and constitutes a
legal, valid and binding obligation of KSB, enforceable against KSB in
accordance with its terms.
(b) The Bank has full corporate power and authority to execute and
deliver this Agreement and the Bank Merger Agreements, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this
Agreement and the Bank Merger Agreements, the performance of its obligations
hereunder and thereunder and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of
the Bank are necessary to authorize this Agreement or the Bank Merger
Agreements or the performance of its obligations hereunder or thereunder or
to consummate the transactions contemplated hereby or thereby (other than,
with respect to the Bank Merger, the approval and adoption of the Bank
Merger Agreements by the Surviving Corporation as the sole stockholder of
the Bank). The Board of Directors of the Bank (the Bank Board ) has approved
this Agreement by unanimous vote and has directed that the Bank Merger
Agreements and the transactions contemplated thereby, including the Bank
Merger, be submitted to KSB as the sole stockholder of the Bank for its
approval. This Agreement has been duly and validly executed and delivered by
the Bank and constitutes a legal, valid and binding obligation of the Bank,
enforceable against the Bank in accordance with its terms. The Bank Merger
Agreements, upon execution and delivery by the Bank, will be duly and validly
executed and delivered by the Bank and will constitute a legal, valid and
binding obligation of the Bank, enforceable against the Bank in accordance
with its terms.
5.5 No Conflict. Neither the execution, delivery and performance of this
Agreement or the KSB Option agreement by KSB, nor the consummation by KSB of
the transactions contemplated hereby or thereby, nor the execution, delivery
and performance of this Agreement or the Bank Merger Agreements by the Bank,
nor the consummation by the Bank of the transactions contemplated hereby or
thereby, nor compliance by KSB or the Bank with any of the terms or provisions
hereof or thereof, will, (i) conflict with, violate or result in a breach of
the Certificate of Incorporation or By-Laws or equivalent organizational
documents of KSB, the Bank or any of their subsidiaries, (ii) conflict with,
violate or result in a breach of any material provision of any statute, code,
ordinance, law, rule, regulation, order, writ, judgment, injunction or decree
applicable to KSB or the Bank or by which any property or asset of KSB or the
Bank is bound or affected, or (iii) conflict with, violate or result in a
breach of any provisions of or the loss of any benefit under, constitute a
default (or an event which with notice or lapse of time or both would
constitute a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a
lien, pledge, security interest, charge or other encumbrance on any property or
asset of KSB or the Bank pursuant to, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which KSB or the Bank is a party or by which KSB or the Bank or any property
or asset of KSB or the Bank is bound or affected, except, in the case of clause
(iii) above, for any such conflicts, violations, breaches, defaults or other
occurrences which would not be deemed material.
5.6 Consents and Approvals.
(a) The execution, delivery and performance of this Agreement and
the KSB Option Agreement by KSB, and the execution, delivery and performance
of this Agreement and the Bank Merger Agreements by the Bank, does not require
any consent, approval, authorization or permit of, or filing with or
notification to, any court, administrative agency or commission or other
governmental or regulatory authority or instrumentally, domestic or foreign,
including, without limitation, any Bank Regulator (as hereinafter defined)
(each a "Governmental Entity"), except (i) for applicable requirements, if
any, of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
state takeover laws, the pre-merger notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
rules and regulations thereunder (the "HSR Act"), and filing and recordation
of appropriate merger documents as required by the DGCL, (ii) for consents and
approvals of or filings, registrations or negotiations with the FRB, the FDIC
and the Superintendent of the Bureau of Banking of the State of Maine (the
"Maine Superintendent"), and (iii) the filings required by the Bank Merger
Agreements. KSB and the Bank are not aware of any reason why the approvals,
consents and waivers of Governmental Entities referred to herein and in Section
8.3 should not be obtained.
(b) The execution, delivery and performance of this Agreement and
the KSB Option Agreement by KSB, and the execution, delivery and performance
of this Agreement and the Bank Merger Agreements by the Bank, does not require
any consent, approval, authorization or permit of, or filing with or
notification to, any third party, except where failure to obtain any such
consent, approval, authorization or permit, or to make any such filing or
notification, would not prevent or significantly delay consummation of the
Merger or the Bank Merger, or otherwise prevent KSB or the Bank from performing
its obligations under this Agreement and the KSB Option Agreement or the Bank
from performing its obligations under the Bank Merger Agreements, or would not,
either individually or in the aggregate, be material.
5.7 Compliance. KSB and the Bank hold, and have at all times held, all
material licenses, franchises, permits and authorizations necessary for the
lawful conduct of their respective businesses under and pursuant to all, and,
except as disclosed in Section 5.7 of the Disclosure Schedule, have complied
with and are not in conflict with, or in default or violation of, (a) any
statute, code, ordinance, law, rule, regulation, order, writ, judgment,
injunction or decree, published policies and guidelines of any Governmental
Entity, applicable to KSB or the Bank or by which any property or asset of KSB
or the Bank is bound or affected or (b) any note, bond, mortgage, indenture,
deed of trust, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which KSB or the Bank is a party or by which KSB
or the Bank or any property or asset of KSB or the Bank is bound or affected,
except for any such non-compliance, conflicts, defaults or violations that
would not, individually or in the aggregate, be material; and neither KSB nor
the Bank knows of, or has received notice of, any material violation of any of
the above. Without limiting the generality of the foregoing, neither KSB nor
the Bank has been advised of the existence of any facts or circumstances which
would cause the Bank to be deemed not to be in satisfactory compliance with the
applicable provisions of the MBCA and, as applicable to the Bank, the Community
Reinvestment Act of 1977, as amended (the CRA ), and the regulations
promulgated thereunder.
5.8 SEC Reports and Bank Reports.
(a) KSB has filed, and made available to Camden, true and complete
copies of all forms, reports and documents required to be filed by it with the
Securities and Exchange Commission (the SEC ) since January 1, 1996, and has
heretofore delivered to Camden, in the form filed with the SEC, true and
complete copies of (i) its Annual Reports on Form 10-KSB for the fiscal years
ended December 31, 1996, December 31, 1997 and December 31, 1998, respectively,
(ii) its Quarterly Reports on Form 10-QSB since January 1, 1996, (iii) all
proxy statements relating to KSB's meetings of stockholders (whether annual or
special) held since January 1, 1996, (iv) all other forms, reports and other
registration statements (other than Quarterly Reports on Form 10-QSB not
referred to in clause (ii) above) filed by KSB with the SEC since January 1,
1996, and (v) all communications mailed by KSB to its stockholders since
January 1, 1996 (the forms, reports and other documents referred to in clauses
(i), (ii), (iii), (iv) and (v) above being referred to herein, collectively, as
the "SEC Reports"). As of their respective dates, the SEC Reports (A) complied
in all material respects as to form with the requirements of the Securities Act
of 1933, as amended (the Securities Act ) and the Exchange Act, as the case
may be, and the rules and regulations thereunder and (B) did not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
KSB has timely filed all SEC Reports and other documents required to be filed
by it under the Securities Act and the Exchange Act. Neither the Bank nor any
of their other subsidiaries is required to file any form, report or other
document with the SEC. KSB has made available to Camden true and complete
copies of all amendments and modifications that have not been filed by KSB
with the SEC to all agreements, documents and other instruments that previously
had been filed by KSB with the SEC and are currently in effect.
(b) KSB, the Bank and their subsidiaries each has timely filed and
made available to Camden true and complete copies of all forms, reports and
documents required to be filed by each of them with all appropriate federal
or state governmental or regulatory authorities charged with the supervision
of banks or bank holding companies or engaged in the insurance of bank
deposits, including without limitation, the FRB, the FDIC and the Maine
Superintendent ("Bank Regulators") since January 1, 1996, and has paid all
fees and assessments due and payable in connection therewith. Such reports
as of their respective date of filing complied in all material respects with
the requirements of all laws, rules and regulations enforced or promulgated by
such Bank Regulators. Except for normal periodic examinations conducted by the
FRB, the FDIC, the Maine Superintendent or any other Bank Regulator in the
regular course of the business of KSB and the Bank (the Bank Examinations),
no Bank Regulator has initiated any proceeding or, to the knowledge of KSB
and the Bank, investigation into the business or operations of KSB or the Bank
since December 31, 1995. Except as disclosed on Section 5.8(b) of the
Disclosure Schedule, KSB and the Bank have resolved all violations, criticisms
or exceptions by any Bank Regulator with respect to any Bank Examination.
5.9 Financial Statements.
(a) Each of the consolidated financial statements of KSB and the
Bank, including, in each case, the notes thereto, contained in the SEC Reports
was prepared, and the financial statements referred to in Section 8.8 hereof
will be prepared, in accordance with GAAP (except as may be indicated in the
notes thereto) and each fairly presents, and the financial statements referred
to in Section 8.8 hereof each will fairly present, the consolidated financial
position, results of operations and changes in financial position of KSB and
the Bank as at the respective dates thereof and for the respective periods
indicated therein, subject, in the case of unaudited statements, to normal
and recurring year-end adjustments normal in nature and not material in
amount. Each of the consolidated financial statements of KSB and the Bank,
including, in each case, the notes thereto, contained in the SEC Reports
comply, and the financial statements referred to in Section 8.8 hereof will
comply, with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto. Without limiting the
generality of the foregoing, (x) the allowance for possible loan losses
included in the consolidated financial statements of KSB and the Bank contained
in the SEC Reports was, and the allowance for possible loan losses to be
included in the financial statements referred to in Section 8.8 hereof will
be, determined in accordance with GAAP and is, and will be, adequate to provide
for losses relating to or inherent in the loan and lease portfolios of KSB and
the Bank as of the balance sheet date reflected in each such KSB SEC Report
(including without limitation commitments to extend credit), and (y) the Other
Real Estate Owned ("OREO") included in the consolidated financial statements of
KSB and the Bank contained in the SEC Reports was, and the OREO included in the
financial statements referred to in Section 8.8 hereof will be, carried net of
reserves at the lower of cost or market value in accordance with GAAP or the
regulations or other requirements of the SEC, the FDIC and the Maine
Superintendent. The books and records of KSB and the Bank are true and
complete in all material respects and have been, and are being, maintained in
all material respects in accordance with applicable legal and accounting
requirements.
(b) The consolidated balance sheets of KSB and the Bank as at
December 31, 1998, contained in the SEC Reports, including the notes thereto,
each makes, and the consolidated balance sheets contained in the financial
statements referred to in Section 8.8 will make, adequate provision for,
reflect or disclose all material liabilities and obligations of every nature
(whether accrued, absolute, contingent or otherwise and whether due or to
become due) of KSB and the Bank as of December 31, 1998, and except as and to
the extent set forth on such consolidated balance sheets or as set forth in
Section 5.9(b) of the Disclosure Schedule, neither KSB nor the Bank has any
material liability or obligation of any nature (whether accrued, absolute,
contingent or otherwise and whether due or to become due) which would be
required to be provided for, reflected or disclosed on a balance sheet, or
in the notes thereto, prepared in accordance with GAAP. To the knowledge of
KSB and the Bank, no facts or circumstances exist which would give either KSB
or the Bank reason to believe that a material liability or obligation that, in
accordance with GAAP applied on a consistent basis, should have been reflected
or disclosed on such balance sheet, was not so reflected or disclosed.
5.10 Absence of Certain Changes or Events. Except as disclosed in Section
5.10 of the Disclosure Schedule, since December 31, 1998, except as
contemplated by this Agreement or as disclosed in any SEC Report filed since
December 31, 1998 and prior to the date of this Agreement, KSB and the Bank
have conducted their businesses only in the ordinary course and in a manner
consistent with past practice and, since December 31, 1998, there has not
been (a) either individually or in the aggregate, any Material Adverse Effect,
and to the knowledge of KSB and the Bank, no fact or condition exists which is
reasonably likely to cause such a Material Adverse Effect in the future, (b)
any material damage, destruction or loss with respect to any property or
asset of KSB or the Bank, (c) any change by KSB or the Bank in its accounting
methods, principles or practices, other than changes required by applicable law
or GAAP or regulatory accounting as concurred in by KSB's independent
accountants, (d) any revaluation by KSB or the Bank of any asset, including,
without limitation, any writing down of the value of inventory or writing off
of notes or accounts receivable, other than in the ordinary course of business
consistent with past practice, (e) any entry into, or renewal of, by KSB or the
Bank into any contract or commitment of more than $50,000 or with a term of
more than one year, (f) any declaration, setting aside or payment of any
dividend or distribution in respect of any capital stock of KSB or the Bank
or any redemption, purchase or other acquisition of any of its securities,
(g) any increase in or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards, or restricted stock awards pursuant
to the KSB Stock Option Plan or otherwise), stock purchase or other employee
benefit plan, or any other increase in the compensation payable or to become
payable to any directors, officers or employees of KSB or the Bank, or any
grant of severance or termination pay, or any contract or arrangement
entered into to make or grant any severance or termination pay, any payment
of any bonus, or the taking of any action not in the ordinary course of
business with respect to the compensation or employment of directors, officers
or employees of KSB or the Bank, (h) any strike, work stoppage, slowdown or
other labor disturbance, (i) any material election made by KSB or the Bank
for federal or state income tax purposes, (j) any change in the credit policies
or procedures of KSB or the Bank, the effect of which was or is to make any
such policy or procedure less restrictive in any material respect, (k) any
material liability or obligation of any nature (whether accrued, absolute,
contingent or otherwise and whether due or to become due), including without
limiting the generality of the foregoing, liabilities as guarantor under any
guarantees or liabilities for taxes, (l) any forgiveness or cancellation of
any indebtedness or contractual obligation other than in the ordinary course
of business consistent with past practice, (m) any mortgage, pledge, lien or
lease of any assets, tangible or intangible, of KSB or the Bank other than in
the ordinary course of business consistent with past practice, (n) any
acquisition or disposition of any assets or properties, or any contract for
any such acquisition or disposition entered into; provided that (A) no single
acquisition or disposition of an asset or property shall exceed $100,000, and
(B) all acquisitions and dispositions of assets or properties by KSB and the
Bank shall in no event exceed $300,000 in the aggregate, or (o) any lease of
real or personal property entered into, other than in connection with
foreclosed property or in the ordinary course of business consistent with
past practice.
5.11 Absence of Litigation. Except as set forth in Section 5.11 of the
Disclosure Schedule, neither KSB nor the Bank is a party to any, and there
are no pending, or to the knowledge of KSB and the Bank, threatened legal,
administrative, arbitral or other claims, actions, proceedings or
investigations of any nature, against KSB or the Bank or any property or
asset of KSB or the Bank, before any court, arbitrator or administrative,
governmental or regulatory authority or body, domestic or foreign, and no
facts or circumstances have come to KSB s or the Bank s attention which have
caused either of them to believe that a material claim, action, proceeding or
investigation against or affecting KSB or the Bank could reasonably be expected
to occur. Neither KSB nor the Bank, nor any property or asset of KSB or the
Bank, is subject to any order, writ, judgment, injunction, decree,
determination or award which restricts its ability to conduct business in any
area.
5.12 Employee Benefit Plans.
(a) Section 5.12 of the Disclosure Schedule sets forth a true and
complete list of all Plans maintained or contributed to by the Bank during
the six years preceding this Agreement. The term "Plans" means all employee
benefit plans, arrangements or agreements that are maintained or contributed
to, or that were maintained or contributed to at any time during the six years
preceding the date of this Agreement, by KSB or the Bank or by any trade or
business, whether or not incorporated (a "KSB ERISA Affiliate"), all of which
together with KSB or the Bank would be deemed a "single employer" within the
meaning of Section 4001 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA").
(b) KSB and the Bank have heretofore delivered to Camden true and
complete copies of each of the Plans and all related documents, including
but not limited to (i) all required Forms 5500 and all related schedules for
such Plans (if applicable) for each of the last two years, (ii) the actuarial
report for such Plan (if applicable) for each of the last two years, and (iii)
the most recent determination letter from the IRS (if applicable) for such
Plan.
(c) (i) Each of the Plans has been operated and administered in all
material respects in accordance with applicable laws, including but not limited
to ERISA and the Code, (ii) each of the Plans intended to be "qualified" within
the meaning of Section 401(a) of the Code has been maintained so as to qualify
from the effective date of such Plan to the Effective Time, (iii) with respect
to each Plan which is subject to Title IV of ERISA, the present value of
"benefit liabilities" (within the meaning of Section 4001(a)(16) of ERISA)
under such Plan, based upon the actuarial assumptions currently prescribed by
the Pension Benefit Guaranty Corporation for plan termination, did not, as of
its latest valuation date, exceed by a material amount the then current value
of the assets of such Plan allocable to such accrued benefits, and there has
been no "accumulated funding deficiency" (whether or not waived), (iv) no Plan
provides benefits, including without limitation death, medical or other
benefits (whether or not insured), with respect to current or former employees
of KSB, the Bank or any KSB ERISA Affiliate beyond their retirement or other
termination of service, other than (u) coverage mandated by applicable law,
(v) life insurance death benefits payable in the event of the death of a
covered employee, (w) disability benefits payable to disabled former employees,
(x) death benefits or retirement benefits under any "employee pension plan,"
as that term is defined in Section 3(2) of ERISA, (y) deferred compensation
benefits accrued as liabilities on the books of KSB, the Bank or any KSB ERISA
Affiliate or (z) benefits the full cost of which is borne by the current or
former employee (or his beneficiary), (v) with respect to each Plan subject to
Title IV of ERISA, no liability under Title IV of ERISA has been incurred by
KSB, the Bank or any KSB ERISA Affiliate that has not been satisfied in full,
no condition exists that presents a material risk to KSB, the Bank or any KSB
ERISA Affiliate of incurring a material liability to or on account of such
Plan, and there has been no "reportable event" (within the meaning of Section
4043 of ERISA and the regulations thereunder), (vi) neither KSB, the Bank, nor
any KSB ERISA Affiliate has ever maintained or contributed to a "multiemployer
pension plan," as such term is defined in Section 3(37) of ERISA, (vii) all
contributions or other amounts payable by KSB or the Bank as of the Effective
Time with respect to each 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) neither KSB, the Bank nor any KSB ERISA Affiliate has engaged in a
transaction in connection with which KSB, the Bank or any KSB ERISA
Affiliate has any material liability for either a civil penalty assessed
pursuant to Section 409 or 502(i) of ERISA or a tax imposed pursuant to
Section 4975 or 4976 of the Code, (ix) consummation of the transactions
contemplated hereby will not cause any amounts payable under any of the Plans
to fail to be deductible for federal income tax purposes under Section 280G of
the Code, (x) there are no pending or, to the knowledge of KSB and the Bank,
threatened or anticipated claims (other than routine claims for benefits) by,
on behalf of or against any of the Plans or any trusts related thereto, and
(xi) with respect to any Plan intended to be an employee stock ownership
plan within the meaning of Section 409 of the Code (the ESOP), the outstanding
indebtedness of the Plan does not exceed $41,000.00.
(d) With respect to any Plan that is a welfare plan (within the
meaning of Section 3(1) of ERISA) (i) no such Plan is funded through a "welfare
benefit fund," as such term is defined in Section 419(e) of the Code, and (ii)
each such Plan complies in all material respects with the applicable
requirements of Section 4980B(f) of the Code, Part 6 of Subtitle B of Title I
of ERISA and any applicable state continuation coverage requirements ("COBRA").
(e) Except as prohibited by law (including Section 411(d)(6) of the
Code), each Plan may be amended, terminated, modified or otherwise revised by
KSB, the Bank or any KSB ERISA Affiliate as of the Effective Time to eliminate
without material effect, any and all future benefit accruals under any Plan
(except claims incurred under any welfare plan).
5.13 Labor Matters. Neither KSB nor the Bank is a party to any collective
bargaining or other labor union or guild contract. There is no pending or, to
the knowledge of KSB and the Bank, threatened, labor dispute, strike or work
stoppage against KSB or the Bank which may interfere with the respective
business activities of KSB or the Bank. Neither KSB nor Bank, nor, to the
knowledge of KSB and the Bank, their respective representatives or employees,
has committed any unfair labor practices in connection with the operation of
the respective businesses of KSB or the Bank, and there is no pending or, to
the knowledge of KSB and the Bank, threatened, charge or complaint against KSB
or the Bank by the National Labor Relations Board or any comparable state
agency.
5.14 Property and Leases.
(a) All of the real property owned or leased by KSB or the Bank is
listed on Section 5.14 of the Disclosure Schedule. Each of KSB and the Bank
has good and marketable title to all the real property referred to in
Section 5.14 of the Disclosure Schedule and all other property owned by it
and included in the consolidated balance sheet of KSB and the Bank included
in its Annual Report on Form 10-KSB for the period ended December 31, 1998.
Each parcel of real property, and each item of personal property, owned or
leased by KSB or the Bank (i) is owned or leased free and clear of all
mortgages, pledges, liens, security interests, conditional and installment
sale agreements, encumbrances, charges or other claims of third parties of
any kind (collectively, "Liens"), other than (A) Liens for current taxes and
assessments not yet past due or which are being contested in good faith,
(B) inchoate mechanics' and materialmen's Liens for construction in progress,
(C) workmen's, repairmen's, warehousemen's and carriers' Liens arising in the
ordinary course of business of KSB or the Bank consistent with past practice,
(D) all matters of record, Liens and other imperfections of title and
encumbrances which, either individually or in the aggregate, would not be
material, and (E) those items that secure public or statutory obligations or
any discount with, borrowing from, or obligations to any Federal Reserve Bank
or Federal Home Loan Bank, interbank credit facilities, or any transaction by
the Bank acting in a fiduciary capacity (collectively, "Permitted Liens"), and
(ii) is neither subject to any governmental decree or order to be sold nor is
being condemned, expropriated or otherwise taken by any public authority with
or without payment of compensation therefor, nor, to the knowledge of KSB or
the Bank, has any such condemnation, expropriation or taking been proposed.
Neither KSB nor the Bank has received any notice of violation of any
applicable zoning regulation, ordinance or other law, order, regulation or
requirement relating to its properties.
(b) All leases of real property leased for the use or benefit of KSB
or the Bank to which KSB or the Bank is a party and all amendments and
modifications thereto, are in full force and effect, and there exists no
default under any such lease by KSB or the Bank, nor, to the knowledge of KSB
and the Bank, any event which with notice or lapse of time or both would
constitute a material default thereunder by KSB or the Bank. The consummation
of the transactions contemplated by this Agreement do not require the consent
of any landlord nor do they cause an event of default under any such leases.
5.15 Taxes.
(a) Each of KSB and the Bank has duly filed in correct form all
Federal, state, county and local information returns and tax returns required
to be filed by it on or prior to the date hereof (all such returns being true
and complete in all material respects) and has duly paid, discharged or made
provisions for the payment of all material Taxes (as hereinafter defined) and
other governmental charges which have been incurred or are due or claimed to be
due from it by Federal, state, county or local taxing authorities on or prior
to the date hereof (including without limitation, if and to the extent
applicable, those due in respect of its properties, income, business, capital
stock, deposits, franchises, licenses, sales and payrolls, and any net worth
tax), other than Taxes or other charges that are not yet delinquent or are
being contested in good faith and have not been finally determined. The
amounts set up as reserves for Taxes on the consolidated balance sheet of KSB
and the Bank included in its Annual Report on Form 10-KSB for the period ended
December 31, 1998 are sufficient in the aggregate for the payment of all
material unpaid Federal, state, county and local Taxes (including any interest
or penalties thereon), whether or not disputed, accrued or applicable, for
the period ended December 31, 1998 and all prior periods covered by such
returns, and for which KSB or the Bank is liable in its own right or as
transferee of the assets of, or successor to, any corporation, person,
association, partnership, joint venture or other entity. The federal income
tax returns of KSB or the Bank have been examined by the Internal Revenue
Service ( IRS ) for all years through 1995 and any liability with respect
thereto has been satisfied, and no deficiencies were asserted as a result of
such examination or all such deficiencies were satisfied. The State of Maine
tax returns of KSB and the Bank have not, in the ten years prior to the date
of this Agreement, been examined or audited by the State of Maine. There are
no material disputes pending or claims asserted for Taxes or assessments upon
KSB or the Bank, nor has KSB or the Bank has been requested to give any
currently effective waivers extending the statutory period of limitation
applicable to any Federal, state, county or local income tax return for any
period. In addition, (a) proper and accurate amounts have been withheld by
KSB or the Bank from their employees for all prior periods in compliance in
all material respects with the tax withholding provisions of applicable
Federal, state, county and local laws; (b) Federal, state, county and local
returns which are accurate and complete in all material respects have been
filed by KSB and the Bank for all periods for which returns were due with
respect to income tax withholding, Social Security and unemployment taxes; and
(c) the amounts shown on such returns to be due and payable have been paid in
full or adequate provision therefor has been included by KSB in its
consolidated financial statements included in its Annual Report on Form 10-KSB
for the period ended December 31, 1998.
(b) No property of KSB or the Bank is property that is or will be
required to be treated as being owned by another person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code (as in effect
prior to its amendment by the Tax Reform Act of 1986) or is "tax-exempt use
property" within the meaning of Section 168(h) of the Internal Revenue Code
of 1986, as amended (the "Code"). Neither KSB nor the Bank has been required
to include in income any adjustment pursuant to Section 481 of the Code by
reason of a voluntary change in accounting method initiated by KSB or the
Bank, and the IRS has not initiated or proposed any such adjustment or change
in accounting method. Neither KSB nor the Bank is a party to any agreement,
contract or arrangement that would, individually or in the aggregate, result
in the payment of an "excess parachute payment" within the meaning of Section
280G of the Code or that would result in payments that would be nondeductible
pursuant to Section 162(m) of the Code.
(c) As used in this Agreement, the term "Taxes" means all Federal,
state, county, local and foreign income, excise, gross receipts, ad valorem,
profits, gains, property, sales, transfer, use, payroll, employment, severance,
withholding, duties, intangibles, franchise and other taxes, charges, levies or
like assessments, including any net worth tax, together with all penalties and
additions to tax and interest thereon.
5.16 Certain Contracts.
(a) Except as set forth in Section 5.16 of the Disclosure Schedule
and in the SEC Reports filed prior to the date of this Agreement, neither KSB
nor the Bank is a party to or bound by any contract, arrangement, commitment or
understanding (whether written or oral): (i) with respect to the employment of
any director, officer, employee or consultant, (ii) which, upon the
consummation of the transactions contemplated by this Agreement or the Bank
Merger Agreements, will result in any payment (whether of severance pay or
otherwise) becoming due from KSB or the Bank to any officer or employee
thereof, (iii) which is a material contract (as defined in Item 601(b)(10) of
Regulation S-K of the SEC) to be performed after the date of this Agreement
that has not been filed or incorporated by reference in the SEC Reports,
(iv) which is a consulting or other agreement (including agreements entered
into in the ordinary course and data processing, software programming and
licensing contracts) not terminable on 60 days or less notice involving the
payment of more than $50,000 per annum, (v) which materially restricts the
conduct of any line of business by KSB or the Bank, (vi) with or to a labor
union or guild (including any collective bargaining agreement), or (vii)
(including any stock option plan, stock appreciation rights plan, restricted
stock plan or stock purchase plan) any of the benefits of which will be
increased, or the vesting of the benefits of which will be accelerated, by
the occurrence of any of the transactions contemplated by this Agreement, or
the value of any of the benefits of which will be calculated on the basis of
any of the transactions contemplated by this Agreement. KSB has previously
delivered to Camden true and complete copies of all employment, consulting and
deferred compensation agreements which are in writing and to which KSB or the
Bank is a party. Each contract, arrangement, commitment or understanding of
the type described in this Section, whether or not set forth in Section 5.16
of the Disclosure Schedule, is referred to herein as a "KSB Contract".
(b) (i) To the knowledge of KSB and the Bank, each KSB Contract
listed on such Disclosure Schedule is legal, valid and binding upon KSB or
the Bank, as the case may be, and in full force and effect, (ii) KSB and the
Bank have in all material respects performed all obligations required to be
performed by it to date under each such KSB Contract, and (iii) no event or
condition exists which constitutes or, after notice or lapse of time or both,
would constitute, a material default on the part of KSB or the Bank under any
such KSB Contract.
5.17 Loan Portfolio. Except as set forth in Section 5.17 of the
Disclosure Schedule, neither KSB nor the Bank is a party to any written or
oral (a) loan agreement, note or borrowing arrangement (including, without
limitation, leases and credit enhancements) (collectively, "Loans") the unpaid
principal balance of which exceeds $75,000 and as to which the obligor is, as
of the date of this Agreement, over 90 days delinquent in payment of principal
or interest, or (b) Loan with any director, executive officer or, to the
knowledge of KSB and the Bank, five percent stockholder of KSB or the Bank,
or to the knowledge of KSB and the Bank, any person, corporation or enterprise
controlling, controlled by or under common control with any of the foregoing.
To the knowledge of KSB and the Bank, all of the Loans originated and held
currently and at the Effective Time by KSB or the Bank, and any other Loans
purchased and held currently and at the Effective Time by KSB or the Bank, were
solicited, originated and exist, and will exist at the Effective Time, in
material compliance with all applicable loan policies and procedures of KSB
and the Bank. Section 5.17 of the Disclosure Schedule sets forth as of
June 30, 1999, (i) all of the Loans in original principal amount in excess
of $75,000 of KSB or the Bank that as of the date of this Agreement are
classified by the Bank as "Other Loans Specially Mentioned", "Special Mention",
"Substandard", "Doubtful", "Loss", "Classified", "Criticized", "Watch list"
or words of similar import, together with the principal amount of and accrued
and unpaid interest on each such Loan and the identity of the obligor
thereunder, and (ii) by category of Loan (i.e., commercial, consumer, etc.),
all of the other Loans of KSB and the Bank that as of the date of this
Agreement are classified as such, together with the aggregate principal amount
of such Loans by category, it being understood that no representation is being
made that the FDIC or the Maine Superintendent would agree with the loan
classifications contained in Section 5.17 of the Disclosure Schedule. KSB
shall promptly inform Camden in writing of any Loan the original principal
balance of which exceeds $75,000 that becomes classified in the manner
described in this Section 5.17, or any Loan the classification of which is
materially and adversely changed at any time after the date of this Agreement.
The information (including electronic information and information contained
on tapes and computer disks) with respect to the Loans furnished to Camden by
KSB and the Bank is true and complete in all material respects.
5.18 Investment Securities. Section 5.18(a) of the Disclosure Schedule
sets forth the book and market value as of June 30, 1999 of the investment
securities, mortgage backed securities, bank-owned life insurance policies
and securities held by KSB and the Bank. Section 5.18(b) of the Disclosure
Schedule sets forth the names of all the joint ventures in which KSB or the
Bank has an investment (whether or not such joint ventures remain active).
Except for pledges to secure public and trust deposits, FRB and Federal Home
Loan Bank of Boston 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 consolidated balance sheet of KSB and the
Bank included in its Annual Report on Form 10-KSB for the period ended
December 31, 1998, and none of the material investments made by KSB or the
Bank since December 31, 1998, is subject to any restriction (contractual,
statutory or otherwise) that would materially impair the ability of the
entity holding such investment freely to dispose of such investment at any
time. KSB has (i) properly reported as such any investment securities which
are required under GAAP to be classified as "available for sale" at the lower
of cost or market, and (ii) accounted for any decline in the market value of
its marketable equity securities portfolio in accordance with Financial
Accounting Standards Board Statement of Financial Accounting Standards No. 12
and Staff Accounting Bulletin No. 59, including without limitation the
recognition through KSB's consolidated statement of operations of any
unrealized loss with respect to any individual marketable equity security as
a realized loss in the accounting period in which a decline in the market
value of such security is determined to be "other than temporary."
5.19 Derivative Transactions. Except pursuant to those agreements
referenced in Section 5.19 of the Disclosure Schedule, neither KSB nor the
Bank is engaged in transactions in or involving forwards, futures, options on
futures, swaps or other derivative instruments except as agent on the order and
for the account of others other than Federal Home Loan Bank advances or in
connection with mortgage loan secondary market activities in the ordinary
course of business consistent with the Bank's past practices. To the extent
that KSB or the Bank is engaged in such transactions, to the knowledge of KSB
and the Bank, none of the counterparties to any contract or agreement with
respect to any such instrument is in default with respect to such contract
or agreement and no such contract or agreement, were it to be a Loan held by
KSB or the Bank, would be classified as "Other Loans Specially Mentioned,"
"Special Mention," "Substandard," "Doubtful," "Loss," "Classified,"
"Criticized," "Credit Risk Assets," "Concerned Loans," "Watch List",
"Impaired", "Non-accrual Status" or words of similar import. The financial
position of KSB and the Bank on a consolidated basis under or with respect to
each such instrument has been reflected in the books and records of KSB and the
Bank in accordance with GAAP consistently applied, and no open exposure of KSB
or the Bank with respect to any such instrument (or with respect to multiple
instruments with any single counterparty) exceeds $50,000.
5.20 Insurance. KSB and the Bank each has made available to Camden true
and complete copies of all material policies of insurance of KSB and the Bank
currently in effect. All of the policies relating to insurance maintained by
KSB or the Bank 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 therefor) are in full force and effect and neither KSB nor the Bank
has received any notice of cancellation with respect thereto. All life
insurance policies on the lives of any of the current and former officers and
directors of KSB and the Bank which are maintained by KSB and the Bank or which
are otherwise included as assets on the books of KSB or the Bank (i) are, or
will at the Effective Time be, owned by KSB or the Bank, as the case may be,
free and clear of any claims thereon by the officers or members of their
families, except with respect to the death benefits thereunder, as to which
KSB and the Bank agree that there will not be an amendment prior to the
Effective Time without the consent of Camden, and (ii) are accounted for
properly as assets on the books of the Bank in accordance with GAAP in all
material respects. Neither KSB nor the Bank has any material liability for
unpaid premiums or premium adjustments not properly reflected on KSB's
consolidated financial statements contained in the SEC Reports.
5.21 Environmental Matters.
(a) Each of KSB and the Bank and, to the knowledge of KSB and the
Bank, any property in which it participates or has participated in the
management and, where required by the context, said term means the owner or
operator of such property (the Participation Facilities ) and any property in
which KSB or the Bank holds a security interest, and where required by the
context, said term means the owner or operator of such property (the Loan
Properties ), are, and have been, in material compliance with all applicable
environmental laws and with all rules, regulations, standards and requirements
of the United States Environmental Protection Agency (the "EPA") and of state
and local agencies with jurisdiction over pollution or protection of the
environment.
(b) There is no suit, claim, action or proceeding pending or, to the
knowledge of KSB or the Bank, threatened, before any Governmental Entity or
other forum in which KSB or the Bank or any Participation Facility has been
or, with respect to threatened proceedings, may be, named as a defendant,
responsible party or potentially responsible party (i) for alleged
noncompliance (including by any predecessor), with any environmental law, rule,
regulation, standard or requirement or (ii) relating to the release into or
presence in the soil, surface waters, groundwaters, stream sediments, surface
or subsurface strata, and ambient air, and any other environmental medium (the
Environment ) of any pollutant, contaminant, or hazardous substance or
hazardous material as defined in or pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., or
any other federal, state, or local environmental law, regulation, or
requirement ( Hazardous Materials ) or petroleum of any kind or origin or in
any form, as defined in or pursuant to the Federal Clean Water Act, 33 U.S.C.
Section 1251 et seq., or any other federal, state, or local environmental law,
regulation, or requirement ( Oil ) whether or not occurring at or on a site
owned, leased or operated by KSB or the Bank or any Participation Facility,
except as have not been or would not be material.
(c) There is no suit, claim, action or proceeding pending or, to the
knowledge of KSB or the Bank, threatened, before any Governmental Entity or
other forum in which any Loan Property has been or, with respect to threatened
proceedings, may be, named as a defendant, responsible party or potentially
responsible party (i) for alleged noncompliance (including by any predecessor)
with any environmental law, rule, regulation, standard or requirement or
(ii) relating to the release into or presence in the Environment of any
Hazardous Material or Oil whether or not occurring at or on a site owned,
leased or operated by a Loan Property, except as have not been or would not
be material.
(d) Neither KSB, the Bank, nor to their knowledge any Participation
Facility or any Loan Property, has received any notice regarding a matter on
which a suit, claim, action or proceeding as described in subsection (b) or
(c) of this Section 5.21 could reasonably be based. No facts or circumstances
have come to KSB s or the Bank s attention which have caused it to believe that
a material suit, claim, action or proceeding as described in subsection (b) or
(c) of this Section 5.21 could reasonably be expected to occur.
(e) During the period of (i) KSB s or the Bank's ownership or
operation of any of their respective current properties, (ii) KSB s or the
Bank's participation in the management of any Participation Facility, or
(iii) KSB s or the Bank's holding of a security interest in a Loan Property,
there has been no release or presence of Hazardous Material or Oil in, on,
under or affecting such property or, to the knowledge of KSB or the Bank, such
Participation Facility or Loan Property, except where such release or presence
is not or would not, either individually or in the aggregate, be material. To
the knowledge of KSB and the Bank, prior to the period of (x) KSB s or the
Bank's ownership or operation of any of their respective current properties
or any previously owned or operated properties, (y) KSB s or the Bank's
participation in the management of any Participation Facility, or (z) KSB s
or the Bank's holding of a security interest in a Loan Property, there was
no release or presence of Hazardous Material or Oil in, on, under or affecting
any such property, Participation Facility or Loan Property, except where such
release or presence is not or would not, either individually or in the
aggregate, be material.
5.22 Intellectual Property. Each of KSB and the Bank owns or possesses
valid and binding licenses and other rights to use without payment of any
material amount all material patents, copyrights, trade secrets, trade names,
service marks and trademarks used in its businesses, and neither KSB nor the
Bank has received any notice of conflict with respect thereto that asserts the
right of others. Each of KSB and the Bank has performed in all material
respects all the obligations required to be performed by them and are not in
material default under any contract, agreement, arrangement or commitment
relating to any of the foregoing.
5.23 Administration of Fiduciary Accounts. Each of KSB and the Bank has
properly administered in all material respects all accounts for which it acts
as a fiduciary, including, but not limited to, accounts for which it serves as
a trustee, agent, custodian, personal representative, guardian, conservator or
investment advisor, in accordance with the terms of the governing documents and
applicable law. Neither KSB nor the Bank nor their respective officers,
directors or employees has committed any breach of trust with respect to any
fiduciary account. The accountings for each such fiduciary account are true
and correct in all material respects and accurately reflects the assets of such
fiduciary account.
5.24 Agreements with Bank Regulators. Except as disclosed on Section 5.24
of the Disclosure Schedule, neither KSB nor the Bank is a party to any written
agreement or memorandum of understanding with, or a party to any commitment
letter or similar undertaking to, or is subject to any order or directive by,
or is a recipient of any extraordinary supervisory letter from, any Bank
Regulator which restricts materially the conduct of its business, or in any
manner relates to its capital adequacy, its loan loss allowances or reserves,
its credit policies or its management, nor has KSB or the Bank been informed
by any Bank Regulator that it is contemplating issuing or requesting any such
order, directive, agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter or similar submission. Neither KSB
nor the Bank 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 KSB or the Bank is entitled to
receive financial assistance or indemnification from any governmental agency.
5.25 Material Interests of Certain Persons. No officer or director of KSB
or the Bank or any "associate" (as such term is defined in Rule 14a-1 under the
Exchange Act) of any such officer or director, has any material interest in any
material contract or property (real or personal), tangible or intangible, used
in or pertaining to the business of KSB or the Bank that would be required to
be disclosed in a proxy statement to stockholders under Regulation 14A of the
Exchange Act.
5.26 Brokers Fees; Opinions. No broker, finder or investment banker,
other than Keefe, Bruyette & Woods, is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by
this Agreement, the Bank Merger Agreements or the KSB Option Agreement based
upon arrangements made by or on behalf of KSB or the Bank. The fee payable
to Keefe, Bruyette & Woods in connection with the transactions contemplated
by this Agreement is as described in an engagement letter between KSB and
Keefe, Bruyette & Woods, a true and complete copy of which has heretofore been
furnished to Camden. On or prior to the execution of this Agreement, KSB has
received the opinion of Keefe, Bruyette & Woods to the effect that, as of the
date of such opinion, the Merger Consideration to be received by the
stockholders of KSB pursuant to the Merger is fair to such stockholders, and
such opinion has not been amended or rescinded as of the date of this
Agreement.
5.27 Joint Proxy Statement. The information contained in the Joint Proxy
Statement to be sent to the stockholders of KSB in connection with the KSB
Meeting will not, on the date the Joint Proxy Statement (or any amendment or
supplement thereto) is first mailed to stockholders of KSB or at the time of
the KSB Meeting, contain any statement which, at such time and in the light
of the circumstances under which it is made, is false or misleading with
respect to any material fact, or omits to state any material fact required to
be stated therein or necessary in order to make the statements therein not
false or misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the KSB
Meeting which shall have become false or misleading. The Joint Proxy Statement
will comply in all material respects as to form with the requirements of the
Exchange Act and the rules and regulations thereunder.
5.28 State Takeover Laws. The Board of Directors of KSB has taken all
necessary action prior to the date of this Agreement in connection with the
approval of the execution, delivery and performance of this Agreement, the
Bank Merger Agreements and the KSB Option Agreement, any purchase or other
transaction respecting KSB Common Stock provided for herein or therein, and
the other transactions contemplated hereby and thereby, including without
limitation approval by the affirmative vote of at least a majority of the
members of KSB Board and a majority of the non-employee directors of KSB Board,
to exempt Camden and CASI from the requirements of any moratorium, business
combination, control share, fair price or other takeover defense laws and
regulations (collectively, Takeover Laws ), if any, of the State of Delaware
and the State of Maine.
5.29 Year 2000.
(a) Each of KSB and the Bank has adopted a plan (in each case, a
Year 2000 Plan ) requiring testing, information-gathering and other procedures
to conform to the deadlines and material requirements and guidelines applicable
to it as a provider of services using Information Technology and imposed by any
Bank Regulator or the FFIEC, to cause such Information Technology to be Year
2000 Compliant (such deadlines, material requirements and guidelines, as they
may be in effect from time to time, being referred to in this Agreement as
the Year 2000 Regulatory Requirements ).
(b) Each of KSB and the Bank has taken appropriate actions and has
committed the resources reasonably necessary or otherwise appropriate to
comply with its Year 2000 Plan in a timely manner. Such actions (including the
testing and information-gathering procedures) have not produced any preliminary
findings or other results which would indicate that the Information Technology
will not be Year 2000 Compliant or that it will not be in compliance with the
Year 2000 Regulatory Requirements; and it has not received any written notice
or preliminary oral notice from a Governmental Entity to one of its officers or
senior executive employees with respect to any adverse action against it
relating to Year 2000 Compliance.
(c) Each of KSB and the Bank has taken appropriate actions to assure
that the Bank has, and will continue to have at all relevant points in time,
adequate funds to meet loan and deposit customer demand in connection with
the Year 2000 date change and related circumstances.
5.30 Disclosure. No representation or warranty contained in this
Agreement, and no statement contained in any Schedule, certificate, list or
other writing furnished to Camden pursuant to the provisions hereof, contains
or will contain any untrue statement of a material fact or omits or will omit
to state a material fact necessary in order to make the statements herein or
therein, in the light of the circumstances in which they are made, not
misleading. No information believed by KSB or the Bank to be material to the
Merger or the Bank Merger and which is necessary to make the representations
and warranties herein contained, taken as a whole, not misleading, to the
knowledge of KSB and the Bank, has been withheld from, or has not been
delivered in writing to, Camden.
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF CAMDEN AND CASI
Camden, and as applicable CASI, hereby represents and warrants to KSB that:
6.1 Corporate Organization. Camden is a corporation duly organized,
validly existing and in good standing under the laws of the State of Maine.
CASI is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and all of the outstanding shares of
capital stock of CASI are owned, directly or indirectly, by Camden. Since the
date of its incorporation, CASI has not engaged in any activities other than
in connection with or as contemplated by this Agreement. United Bank is a
banking organization, duly organized, validly existing and in good standing
under the laws of the State of Maine, and all of the outstanding shares of
capital stock of United Bank are owned, directly or indirectly, by Camden.
Each of Camden, CASI and United Bank has the requisite power and authority
and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals would not, either individually
or in the aggregate, have a material adverse effect on the business, assets,
liabilities, financial condition or results of operations of Camden and its
subsidiaries taken as a whole.
6.2 Authority. Each of Camden and CASI has full corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. Each of
Camden and United Bank has full corporate power and authority to execute and
deliver the Bank Merger Agreements, to perform its obligations thereunder and
to consummate the transactions contemplated thereby. The execution and
delivery of this Agreement and the Bank Merger Agreements, the performance
by Camden and CASI of its obligations hereunder, the performance by Camden and
United Bank of its obligations thereunder, the consummation by Camden and CASI
of the transactions contemplated hereby, and the consummation by Camden and
United Bank of the transactions contemplated thereby have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of Camden and CASI are necessary to authorize this Agreement, or on
the part of Camden and United Bank are necessary to execute the Bank Merger
Agreements, or the performance of any of their respective obligations
hereunder or thereunder, as applicable, or to consummate the transactions
contemplated hereby or thereby, other than the approval of each of their
respective stockholders, if required. This Agreement has been duly and
validly executed and delivered by each of Camden and CASI and constitutes a
legal, valid and binding obligation of Camden and CASI, enforceable against
each such party in accordance with its terms. On the date executed and
delivered by Camden and United Bank, the Bank Merger Agreements will be duly
and validly executed and delivered by Camden and United Bank and will
constitute a legal, valid and binding obligation of Camden and United Bank,
enforceable against each such party in accordance with its terms.
6.3 No Conflict. Neither the execution, delivery and performance of this
Agreement by Camden or CASI, or the Bank Merger Agreements by Camden and United
Bank, nor the consummation by Camden and CASI of the transactions contemplated
hereby, nor the consummation by Camden and United Bank of the transactions
contemplated thereby, will (i) conflict with, violate or result in a breach
of the Certificate of Incorporation or By-Laws or equivalent organizational
documents of Camden, CASI or United Bank, as applicable, (ii) conflict with,
violate or result in a breach of any material provision of any statute, code,
ordinance, law, rule, regulation, order, writ, judgment, injunction or decree
applicable to Camden, CASI or United Bank, as applicable or by which any
property or asset of Camden, CASI or United Bank, as applicable, is bound or
affected, or (iii) conflict with, violate or result in a breach of any
provisions of or the loss of any benefit under, constitute a default (or an
event which with notice or lapse of time or both would constitute a default)
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien, pledge, security
interest, charge or other encumbrance on any property or asset of Camden,
CASI or United Bank, as applicable, pursuant to, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, deed of trust, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Camden, CASI or United Bank, as applicable is a party or by which
Camden, CASI or United Bank, as applicable, or any property or asset of such
party is bound or affected, except, in the case of clause (iii) above, for
any such conflicts, violations, breaches, defaults or other occurrences which
would not, individually or in the aggregate, have a material adverse effect
on the business, assets, liabilities, financial condition or results of
operations of Camden and its subsidiaries taken as a whole.
6.4 Capitalization. As of the date hereof, the authorized stock of
Camden consists solely of 10,000,000 shares of Camden Common Stock, of which,
as of the date hereof, 6,557,650 shares were outstanding; 570,590 shares of
Camden Common Stock are directly or indirectly held by Camden as treasury
stock; and there are no shares of preferred stock outstanding as of the date
hereof. As of the date hereof, the authorized stock of CASI consists
solely of 1,000 shares of CASI Common Stock, par value $0.01 per share, of
which, as of the date hereof, 1,000 shares were outstanding. The outstanding
shares of Camden and CASI's capital stock are validly issued, fully paid and
nonassessable, and subject to no preemptive rights (and were not issued in
violation of any preemptive rights). As of the date hereof, there are no
shares of Camden or CASI capital stock authorized and reserved for issuance,
Camden and CASI do not have any Rights issued and outstanding, and Camden and
CASI do not have any commitment to authorize, issue or sell any such shares or
Rights, except pursuant to this Agreement or Compensation and Benefit Plans.
Since March 31, 1999, neither Camden nor CASI has issued any shares of its
stock or Rights in respect thereof or reserved any shares for such purposes,
other than pursuant to Compensation and Benefit Plans.
6.5 Consents and Approvals. The execution, delivery and performance of
this Agreement by Camden and CASI, and the Bank Merger Agreements by Camden and
United Bank, does not require any consent, approval, authorization or permit
of, or filing with or notification to any Governmental Entity, (i) except for
those referred to in Section 5.6 hereof, and (ii) except for any consent,
approval, authorization, permit of, or filing with, or notification to, any
Governmental Entity where failure to obtain any such consent, approval,
authorization or permit, or to make any such filing or notification, would not
prevent or significantly delay consummation of the Merger, or otherwise prevent
Camden or CASI from performing the obligations contemplated under this
Agreement to be performed by them or Camden or United Bank from performing
its obligations under the Bank Merger Agreements, or which, either individually
or in the aggregate, would not, in the reasonable judgment of the parties
hereto, have a material adverse effect on the business, assets, liabilities,
financial condition or results of operation of Camden and its subsidiaries
taken as a whole.
6.6 Joint Proxy Statement. The information supplied by Camden and CASI
for inclusion in the Joint Proxy Statement will not, on the date the Joint
Proxy Statement (or any amendment or supplement thereto) is first mailed to
stockholders of KSB or at the time of the KSB Meeting, contain any statement
which, at such time and in light of the circumstances under which it is made,
is false or misleading with respect to any material fact, or omits to state
any material fact required to be stated therein or necessary in order to make
the statements therein not false or misleading or necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the KSB Meeting which shall have become false or misleading.
6.7 SEC Reports and Bank Reports.
(a) Camden has filed, and made available to KSB, true and complete
copies of all forms, reports and documents required to be filed by it with the
SEC since January 1, 1996, and has heretofore delivered to KSB, in the form
filed with the SEC, true and complete copies of (i) its Annual Reports on
Form 10-K for the fiscal years ended December 31, 1996, December 31, 1997 and
December 31, 1998, respectively, (ii) its Quarterly Report on Form 10-Q since
January 1, 1996, (iii) all proxy statements relating to Camden's meetings of
stockholders (whether annual or special) held since January 1, 1996, (iv) all
other forms, reports and other registration statements (other than Quarterly
Reports on Form 10-Q not referred to in clause (ii) above) filed by Camden
with the SEC since January 1, 1996, and (v) all communications mailed by Camden
to its stockholders since January 1, 1996 (the forms, reports and other
documents referred to in clauses (i), (ii), (iii), (iv) and (v) above being
referred to herein, collectively, as the "Camden SEC Reports"). As of their
respective dates, the Camden SEC Reports (A) complied in all material respects
as to form with the requirements of the Securities Act and the Exchange Act, as
the case may be, and the rules and regulations thereunder and (B) did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading. Camden has timely filed all SEC Reports and other
documents required to be filed by it under the Securities Act and the Exchange
Act. Neither the Camden nor any of its subsidiaries is required to file any
form, report or other document with the SEC. Camden has made available to KSB
true and complete copies of all amendments and modifications that have not been
filed by Camden with the SEC to all agreements, documents and other instruments
that previously had been filed by Camden with the SEC and are currently in
effect.
(b) Camden and its subsidiaries each have timely filed and made
available to KSB true and complete copies of all forms, reports and documents
required to be filed by each of them with all appropriate Bank Regulators since
January 1, 1996, and has paid all fees and assessments due and payable in
connection therewith. Such reports as of their respective date of filing
complied in all material respects with the requirements of all laws, rules and
regulations enforced or promulgated by such Bank Regulators. Except for Bank
Examinations no Bank Regulator has initiated any proceeding or, to the
knowledge of Camden, investigation into the business or operations of Camden,
Camden National Bank or United Bank since December 31, 1995. Camden has
resolved all violations, criticisms or exceptions by any Bank Regulator with
respect to any Bank Examination.
6.8 Financial Statements Each of the consolidated financial statements
of Camden and its subsidiaries, including, in each case, the notes thereto,
contained in the Camden SEC Reports was prepared in accordance with GAAP
(except as may be indicated in the notes thereto) and each fairly presents
the consolidated financial position, results of operations and changes in
financial position of Camden and its subsidiaries as at the respective dates
thereof and for the respective periods indicated therein, subject, in the case
of unaudited statements, to normal and recurring year-end adjustments normal
in nature and not material in amount.
6.9 Compliance. Each of Camden, CASI, Camden National Bank and United
Bank hold, and at all relevant times have held, all material licenses,
franchises, permits and authorizations necessary for the lawful conduct of
their respective businesses under and pursuant to all, and have complied with
and are not in conflict with, or in default or violation of, (a) any statute,
code, ordinance, law, rule, regulation, order, writ, judgment, injunction or
decree, published policies and guidelines of any Governmental Entity,
applicable to it or by which any of its properties or assets is bound or
affected, or (b) any note, bond, mortgage, indenture, deed of trust, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which it is a party or by which any of its properties or assets is bound
or affected, except, in each case, for the failure to obtain or maintain any
required license, permit or authorization or any such non-compliance, conflict,
default or violation that would not, individually or in the aggregate, prevent
or significantly delay consummation of the Merger. Camden has made available
to KSB a true and correct copy of the most recent CRA report pertaining to
Camden.
6.10 Absence of Certain Changes or Events. Since December 31, 1998,
except as contemplated by this Agreement or as disclosed in any Camden SEC
Report filed since December 31, 1998 and prior to the date of this Agreement,
Camden and its subsidiaries have conducted their businesses only in the
ordinary course and in a manner consistent with past practice and, since
December 31, 1998, there has not been either individually or in the aggregate,
any Material Adverse Effect, and to the knowledge of Camden and its
subsidiaries, no fact or condition exists which is reasonably likely to cause
such a Material Adverse Effect in the future.
6.11 Employee Benefit Plans.
(a) The term Camden Plans means all employee benefit plans,
arrangements or agreements that are maintained or contributed to, or that
were maintained or contributed to at any time during the six years preceding
the date of this Agreement, by Camden or by any trade or business, whether or
not incorporated (a Camden ERISA Affiliate ), all of which together with
Camden would be deemed a single employer within the meaning of Section 4001
of ERISA.
(b) (i) Each of the Camden Plans has been operated and administered
in all material respects in accordance with applicable laws, including but not
limited to ERISA and the Code, (ii) each of the Camden Plans intended to be
qualified within the meaning of Section 401(a) of the Code has been maintained
so as to qualify from the effective date of such Camden Plan to the Effective
Time, (iii) with respect to each Camden Plan which is subject to Title IV of
ERISA, there has been no accumulated funding deficiency (whether or not
waived), (iv) with respect to each Camden Plan subject to Title IV of ERISA,
no liability under Title IV of ERISA has been incurred by Camden or any Camden
ERISA Affiliate that has not been satisfied in full, no condition exists that
presents a material risk to Camden or any Camden ERISA Affiliate of incurring
a material liability to or on account of such Camden Plan, and there has been
no reportable event (within the meaning of Section 4043 of ERISA and the
regulations thereunder) other than those events as to which the 30 day notice
requirement is waived under Pension Benefit Guaranty Corporation Regulations
Section 4043, (v) neither Camden, nor any Camden ERISA Affiliate has ever
maintained or contributed to a multiemployer pension plan, as such term is
defined in Section 3(37) of ERISA, (vi) all contributions or other amounts
payable by Camden as of the Effective Time with respect to each Camden Plan
in respect of current or prior plan years have been paid or accrued in
accordance with GAAP and Section 412 of the Code, (vii) neither Camden nor
any Camden ERISA Affiliate has engaged in a transaction in connection with
which Camden or any Camden ERISA Affiliate has any material liability for
either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or
a tax imposed pursuant to Section 4975 or 4976 of the Code, and (viii) there
are no pending or, to the knowledge of Camden, threatened or anticipated
claims (other than routine claims for benefits) by, on behalf of or against
any of the Camden Plans or any trusts related thereto.
(c) With respect to any Camden Plan that is a welfare plan (within
the meaning of Section 3(1) of ERISA) (i) no such Camden Plan is funded through
a welfare benefit fund, as such term is defined in Section 419(e) of the Code,
and (ii) each such Camden Plan complies in all material respects with the
applicable requirements of COBRA.
6.12 Environmental. Except as disclosed in any Camden SEC Report, any
Phase I Environmental Site Assessment prepared by or for the benefit of
Camden, or in Section 6.12 of the Disclosure Schedule:
(a) To the knowledge of Camden, each of Camden and its subsidiaries,
any Participation Facilities and any property in which Camden or any of its
subsidiaries holds a security interest, and where required by the context,
the Loan Properties, are, and have been, in material compliance with all
applicable environmental laws and with all rules, regulations, standards and
requirements of the EPA and of state and local agencies with jurisdiction over
pollution or protection of the environment.
(b) There is no suit, claim, action or proceeding pending or, to the
knowledge of Camden and its subsidiaries, threatened, before any Governmental
Entity or other forum in which Camden or any of its subsidiaries or, to the
knowledge of Camden, any Participation Facility has been or, with respect to
threatened proceedings, may be, named as a defendant, responsible party or
potentially responsible party (i) for alleged noncompliance (including by
any predecessor), with any environmental law, rule, regulation, standard or
requirement or (ii) relating to the release into or presence in the
Environment of any Hazardous Materials or Oil whether or not occurring at or
on a site owned, leased or operated by Camden or any of its subsidiaries or any
Participation Facility, except as have not been or would not be material.
(c) To the knowledge of Camden, there is no suit, claim, action or
proceeding pending or threatened, before any Governmental Entity or other
forum in which any Loan Property has been or, with respect to threatened
proceedings, may be, named as a defendant, responsible party or potentially
responsible party (i) for alleged noncompliance (including by any predecessor)
with any environmental law, rule, regulation, standard or requirement or
(ii) relating to the release into or presence in the Environment of any
Hazardous Material or Oil whether or not occurring at or on a site owned,
leased or operated by a Loan Property, except as have not been or would not
be material.
(d) Neither Camden nor any of its subsidiaries, nor to their
knowledge any Participation Facility or any Loan Property, has received any
notice regarding a matter on which a suit, claim, action or proceeding as
described in subsection (b) or (c) of this Section 6.12 could reasonably be
based. No facts or circumstances have come to Camden s nor any of its
subsidiaries attention which have caused it to believe that a material suit,
claim, action or proceeding as described in subsection (b) or (c) of this
Section 6.12 could reasonably be expected to occur.
(e) To the knowledge of Camden, during the period of (i) Camden s
and its subsidiaries ownership or operation of any of their respective current
properties, (ii) Camden s and its subsidiaries participation in the management
of any Participation Facility, or (iii) Camden s and its subsidiaries holding
of a security interest in a Loan Property, there has been no release or
presence of Hazardous Material or Oil in, on, under or affecting such property
of Camden or such Participation Facility or Loan Property, except where such
release or presence is not or would not, either individually or in the
aggregate, be material. To the knowledge of Camden and its subsidiaries,
prior to the period of (Camden s and its subsidiaries ownership or operation
of any of their respective current properties or any previously owned or
operated properties, (y) Camden s and its subsidiaries participation in the
management of any Participation Facility, or (z) Camden s and its subsidiaries
holding of a security interest in a Loan Property, there was no release or
presence of Hazardous Material or Oil in, on, under or affecting any such
property, Participation Facility or Loan Property, except where such release
or presence is not or would not, either individually or in the aggregate, be
material.
6.13 Agreements with Bank Regulators. Neither Camden nor any of its
subsidiaries is a party to any written agreement or memorandum of understanding
with, or a party to any commitment letter or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any extraordinary
supervisory letter from, any Bank Regulator which restricts materially the
conduct of its business, or in any manner relates to its capital adequacy, its
loan loss allowances or reserves, its credit policies or its management, nor
has Camden or any of its subsidiaries been informed by any Bank Regulator
that it is contemplating issuing or requesting any such order, directive,
agreement, memorandum of understanding, extraordinary supervisory letter,
commitment letter or similar submission. Neither Camden nor any of its
subsidiaries 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 Camden or any of its subsidiaries is
entitled to receive financial assistance or indemnification from any
governmental agency.
6.14 Year 2000.
(a) Each of Camden and its subsidiaries (other than CASI) has
adopted a Year 2000 Plan requiring testing, information-gathering and other
procedures to conform to the Year 2000 Regulatory Requirements.
(b) Each of Camden and its subsidiaries (other than CASI) has taken
appropriate actions and has committed the resources reasonably necessary or
otherwise appropriate to comply with its Year 2000 Plan in a timely manner.
Such actions (including the testing and information-gathering procedures) have
not produced any preliminary findings or other results which would indicate
that the Information Technology will not be Year 2000 Compliant or that it will
not be in compliance with the Year 2000 Regulatory Requirements; and it has not
received any written notice or preliminary oral notice from a Governmental
Entity to one of its officers or senior executive employees with respect to
any adverse action against it relating to Year 2000 Compliance.
(c) Each of Camden and its subsidiaries (other than CASI) has taken
appropriate actions to assure that each of United Bank and Camden National Bank
has, and will continue to have at all relevant points in time, adequate funds
to meet loan and deposit customer demand in connection with the Year 2000 date
change and related circumstances.
6.15 Brokers Fees. Except for the fees payable to Ryan, Beck & Co., no
broker, finder or investment banker is entitled to any brokerage, finder's
or other fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of Camden or
CASI.
6.16 Disclosure. No representation or warranty contained in this
Agreement, and no statement contained in any Schedule, certificate, list or
other writing furnished to KSB pursuant to the provisions hereof, contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements herein or
therein, in the light of the circumstances in which they are made, not
misleading. No information believed by Camden or its subsidiaries to be
material to the Merger or the Bank Merger and which is necessary to make the
representations and warranties herein contained, taken as a whole, not
misleading, to the knowledge of Camden and its subsidiaries, has been withheld
from, or has not been delivered in writing to, KSB.
ARTICLE VII - CONDUCT OF BUSINESS PENDING
THE MERGER
7.1 Covenants of KSB and the Bank.
(a) KSB and the Bank each covenants and agrees that, between the
date of this Agreement and the Effective Time, unless Camden shall otherwise
agree in writing, the business of KSB and the Bank shall be conducted only in,
and KSB and the Bank shall not take any action except in, the usual, regular
and ordinary course of business and in a manner consistent with prudent banking
practice and generally to conduct their business in substantially the same way
as heretofore conducted, and without limiting the foregoing, to continue to
operate in the same geographic markets serving the same market segments and
without significant increase in the rate of growth of the Bank's loan
portfolio. KSB and the Bank shall use their reasonable best efforts to
preserve substantially intact the business organization of KSB and the Bank,
to keep available the present services of the officers, employees and
consultants of KSB and the Bank and to preserve the current relationships and
goodwill of KSB and the Bank with customers, suppliers and other persons with
which KSB or the Bank have business relationships, including without
limitation, implementing a deposit retention program in furtherance thereof.
(b) By way of amplification and not limitation of clause (a) above,
except as contemplated by this Agreement, the Bank Merger Agreements and the
KSB Option Agreement, KSB and the Bank shall not, between the date of this
Agreement and the Effective Time, directly or indirectly to do, or publicly
announce an intention to do, any of the following without the prior written
consent of Camden:
(i) amend or otherwise change its Certificate of Incorporation
or By-laws or equivalent organizational documents;
(ii) issue, deliver, sell, pledge, dispose of, grant, encumber,
or authorize the issuance, delivery, sale, pledge, disposition, grant or
encumbrance of, any shares of capital stock of any class of KSB or the
Bank (other than the issuance of shares of KSB Common Stock upon the
exercise of KSB Stock Options issued in accordance with the provisions
of the KSB Stock Option Plan and outstanding prior to the date of this
Agreement), or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of such capital stock, or any
other ownership interest, of KSB or the Bank, or enter into any agreement
with respect to any of the foregoing;
(iii) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock, except for (A) the declaration and payment
by KSB of a regular quarterly cash dividend, in a per share amount not
to exceed $0.04, and (B) the declaration and payment of a regular
quarterly cash dividend by the Bank to KSB provided that after the
declaration and payment of such dividend, the Bank will remain well
capitalized under the applicable capital adequacy regulations of the FDIC;
(iv) split, combine or reclassify any shares of its capital
stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, except upon the exercise or fulfillment of rights or
options issued or existing pursuant to employee benefit plans, programs
or arrangements, all to the extent outstanding and in existence on the
date of this Agreement;
(v) repurchase, redeem or otherwise acquire any shares of the
capital stock of KSB or the Bank, or any securities convertible into or
exercisable for any shares of the capital stock of KSB or the Bank;
(vi) enter into any new line of business or materially expand
the business currently conducted by KSB and the Bank or file any
application to relocate or terminate the operations of any banking
office of KSB or the Bank;
(vii) acquire or agree to acquire, by merging or consolidating
with, or by purchasing an equity interest in or a portion of the assets
of, or by any other manner, any business or any corporation, partnership,
other business organization or any division thereof or any material amount
of assets, other than subject to Section 7.5 hereof;
(viii) incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any individual,
corporation or other entity, or make any loan or advance, other than in
the ordinary course of business consistent with past practice;
(ix) enter into any contract or agreement other than in the
ordinary course of business consistent with past practice and, in any
event, regardless of whether consistent with past practice, undertake or
enter into (i) any contract or other commitment (other than contracts or
commitments related to Loans) involving an aggregate payment by or to KSB
or the Bank under any such contract or commitment of more than $50,000 or
having a term of one year or more from the time of execution, (ii) any
contract or commitment, or related contracts or commitments, for Loans
having an original principal amount of $400,000;
(x) authorize any single capital expenditure which is in excess
of $25,000 or capital expenditures which are, in the aggregate, in excess
of $50,000 for KSB and the Bank taken as a whole, except for written
contractual commitments entered into prior to the date of this Agreement
as disclosed in the Disclosure Schedule;
(xi) (i) except as required by applicable law or as specified
in Section 7.1(b)(xi) of the Disclosure Schedule, (x) adopt, amend, renew
or terminate any Plan or any agreement, arrangement, plan or policy
between KSB or the Bank and one or more of its current or former
directors, officers or employees, or (y) increase in any manner the
compensation or fringe benefits of any director, officer or employee or
pay any benefit not required by any plan or agreement as in effect as of
the date hereof (including, without limitation, the granting of stock
options, stock appreciation rights, restricted stock, restricted stock
units or performance units or shares pursuant to the KSB Stock Option
Plans or otherwise); provided, however, that KSB and the Bank may, in
consultation with Camden, grant salary increases to its employees (other
than those employees who are officers) at the regular review date of such
employees in an aggregate amount for all employees not to exceed four
percent (4%) of the aggregate current annualized base salaries of such
employees or constitute more than a 10% increase with respect to any one
employee; or (ii) enter into, modify or renew any employment, severance
or other agreement with any director, officer or employee of KSB or the
Bank, or establish, adopt, enter into or amend any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted
stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement providing for any benefit to any director, officer or
employee;
(xii) take any action with respect to changes in accounting
methods, principles or practices, other than changes required by
applicable law or GAAP or regulatory accounting as concurred in by KSB's
independent accountants;
(xiii) make any tax election or settle or compromise any
Federal, state, local or foreign tax liability;
(xiv) pay, discharge or satisfy any claim, liability or
obligation, other than the payment, discharge or satisfaction, in the
ordinary course of business and consistent with past practice, of
liabilities reflected or reserved against in the consolidated balance
sheet of KSB and the Bank included in Annual Report on Form 10-KSB for
the period ended December 31, 1998, or subsequently incurred in the
ordinary course of business and consistent with past practice or in
connection with this Agreement;
(xv) enter into any investment in real estate or in any real
estate development project, other than in connection with foreclosures,
settlements in lieu of foreclosure or troubled loan or debt restructurings
which, in each case, do not require the advance of any new funds and are
in the ordinary course of business consistent with past practice;
(xvi) sell any securities in its investment portfolio, except
in the ordinary course of business, or engage in transactions in or
involving forwards, futures, options on futures, swaps or similar
derivative instruments;
(xvii) sell, lease, encumber, assign or otherwise dispose of,
or agree to sell, lease, encumber, assign or otherwise dispose of, any
of its material assets, properties or other rights or agreements or
purchase or sell any loans in bulk;
(xviii) take any action that is intended or reasonably can be
expected to result in any of its representations and warranties set forth
in this Agreement being or becoming untrue in any material respect, or
any of the conditions to the consummation of the Merger, the Bank Merger
and the other transactions contemplated by this Agreement set forth in
Article IX not being satisfied in any material respect, or in any material
violation of any provision of this Agreement, the Bank Merger Agreements
or the KSB Option Agreement, except, in every case, as may be required by
applicable law;
(xix) commit any act or omission which constitutes a material
breach or default by KSB or the Bank under any agreement or understanding
with Bank Regulators or under any material contract or material license to
which any of them is a party or by which any of them or their respective
properties is bound;
(xx) foreclose upon or take a deed or title to any commercial
real estate without first conducting a Phase I environmental assessment of
the property or foreclose upon any commercial real estate if such
environmental assessment indicates the presence of Hazardous Material in
amounts which, if such foreclosure were to occur, would be material;
(xxi) enter into or renew, amend or terminate, or give notice
of a proposed renewal, amendment or termination of or make any commitment
with respect to, (i) any contract, agreement or lease for office space,
operations space or branch space to which KSB or the Bank is a party or
by which KSB or the Bank or their respective properties is bound; (ii) any
lease, contract or agreement other than in the ordinary course of business
consistent with past practice including renewals of leases to existing
tenants of KSB or the Bank; (iii) regardless of whether consistent with
past practices, any lease, contract, agreement or commitment involving an
aggregate payment by or to KSB or the Bank of more than $50,000 or having
a term of one year or more from the time of execution;
(xxii) change in any material respect its loan policies or
procedures, except as required by regulatory authorities; or
(xxiii) agree to do any of the foregoing.
(c) To the extent that KSB or the Bank is at any time prior to
Closing subject to any memorandum of understanding, cease and desist order,
injunction, order, judgment, decree or other regulatory restriction, KSB and
the Bank shall comply with all requirements of such regulatory restriction and
take all steps that are necessary to satisfy and discharge all of their
respective obligations thereunder.
7.2 Camden Products and Services. From and after the date hereof,
Camden, KSB and the Bank shall consult with each other on the introduction of
products and services not currently offered by KSB or the Bank which Camden
would expect to make available to customers following the Merger and the Bank
Merger, and KSB and the Bank shall consider offering such products and services
to its customers prior to the Effective Date, on terms and conditions mutually
acceptable to Camden, KSB and the Bank; provided, however, that nothing herein
shall obligate KSB or the Bank to offer any such products or services prior to
the Effective Time.
7.3 System Conversions. From and after the date hereof, Camden and the
Bank shall meet on a regular basis to discuss and plan for the conversion of
the Bank's data processing and related electronic informational systems to
those used by Camden and its Subsidiaries, which planning shall include, but
not be limited to, discussion of the possible termination by the Bank of third-
party service provider arrangements effective at the Effective Time or at a
date thereafter, non-renewal of personal property leases and software licenses
used by the Bank in connection with its systems operations and outsourcing, as
appropriate, of proprietary or self-provided system services, it being
understood that the Bank shall not be obligated to take any such action
prior to the Effective Time and, unless the Bank otherwise agrees, no
conversion shall take place prior to the Effective Time. In the event that
the Bank takes, at the request of Camden, any action relative to third parties
to facilitate the conversion that results in the imposition of any termination
fees or charges, Camden shall indemnify the Bank on terms reasonably
satisfactory to the Bank for any such fees and expenses, and the costs of
reversing the conversion process, if either Camden or CASI has failed to
fulfill any material obligation under this Agreement and such failure has
been the cause of, or resulted in, the termination or this Agreement pursuant
to Section 10.1.
7.4 Certain Changes and Adjustments. Prior to the Closing, Camden, KSB
and the Bank shall consult and cooperate with each other concerning the Bank's
loan, litigation and real estate valuation policies and practices (including
loan classifications and levels of reserves) to reflect Camden's plans with
respect to the conduct of the Surviving Corporation's business and the then
anticipated post-closing disposition of certain assets of the Surviving
Corporation following the Bank Merger; provided, however, that neither KSB nor
the Bank shall be obligated to take any action pursuant to this Section which
is inconsistent with GAAP and unless and until Camden acknowledges, and KSB
and the Bank are satisfied, that all conditions to its obligation to
consummate the Merger have been satisfied; and provided further, that
neither KSB nor the Bank shall be obligated to take any action pursuant to this
Section 7.4 earlier than five (5) business days prior to the Effective Date.
No action taken by KSB or the Bank pursuant to this Section or the consequences
resulting therefrom shall be deemed to be a breach of any representation,
warranty, agreement or covenant herein or constitute a Material Adverse Effect.
7.5 ALCO Management. KSB and the Bank agree that during the period from
the date of this Agreement through the Effective Time, they will consult with
Camden in the development of a reasonable program to manage the Bank's interest
sensitive assets and liabilities (including its fixed-rate mortgage portfolio
and its investment portfolio), which program will include a policy not to
acquire securities for the investment portfolio of the Bank other than
securities which were issued by the United States of America and have a
maturityn date that is not more than two years after the date of acquisition
thereof, unless otherwise agreed by the parties. KSB, the Bank and Camden
agree to consult on investment programs to be administered by the Bank.
7.6 Covenants of Camden. During the period from the date of this
Agreement and continuing until the Effective Time, Camden shall not, and shall
not permit any of its subsidiaries to, take any action that is intended or
which reasonably can be expected to result in any of its representations and
warranties set forth in this Agreement being untrue in any material respect,
or in any of the conditions to the Merger, the Bank Merger or other
transactions contemplated in this Agreement as set forth in Article IX not
being satisfied in any material respect, or in a material violation of any
provision of this Agreement, the Bank Merger Agreements or the KSB Option
Agreement, except, in every case, as may be required by applicable law.
7.7 Affiliate Agreements.
(a) Not later than the 15th day prior to the mailing of the Joint
Proxy Statement, each party shall deliver to the other, a schedule of each
person that, to its knowledge, is or is reasonably likely to be, as of the date
of the relevant Meeting, deemed to be an affiliate of it (each, an Affiliate)
as that term is used in SEC Accounting Series Releases 130 and 135 and, in the
case of KSB only, in Rule 145 under the Securities Act.
(b) Each party shall use its reasonable best efforts to cause each
person who may be deemed to be an Affiliate of it to execute and deliver to
the other party on or before the date of mailing of the Joint Proxy Statement
an agreement to comply with SEC Accounting Releases 130 and 135 and, in the
case of KSB only, with Rule 145 under the Securities Act, in the forms attached
hereto as Exhibits A-1 ( Camden Affiliates Agreement ) and A-2 ( KSB Affiliates
Agreement ), respectively.
(c) Within thirty (30) days after the end of the first complete
calendar month ending at least thirty (30) days after the Closing Date, Camden
will publish results including at least thirty (30) days of combined operations
of Camden and KSB as referred to in the KSB Affiliates Agreement and as
contemplated by and in accordance with SEC Accounting Release No. 135.
7.8 Takeover Laws. No party shall take any action that would cause the
transactions contemplated by this Agreement and the KSB Option Agreement (in
the case of KSB) to be subject to requirements imposed by any Takeover Law and
each party shall take all necessary steps within its control to exempt (or
ensure the continued exemption of) the transactions contemplated by this
Agreement and the KSB Option Agreement (in the case of KSB) from, or if
necessary challenge the validity or applicability of, any applicable Takeover
Law, as now or hereafter in effect, that purports to apply to this Agreement,
the KSB Option Agreement (in the case of KSB) or the transactions contemplated
hereby or thereby.
7.9 No Rights Triggered. Each of Camden, CASI and KSB shall take all
steps necessary to ensure that the entering into of this Agreement and the
consummation of the transactions contemplated hereby and any other action or
combination of actions, or any other transactions contemplated hereby, do not
and will not result in the grant of any rights to any person (i) under its
charter or bylaws, or (ii) under any material agreement to which it or any
of its Subsidiaries is a party.
7.10 Shares Listed. In the case of Camden, Camden shall use its
reasonable best efforts to list, prior to the Effective Date, on the AMEX, upon
official notice of issuance, the shares of Camden Common Stock to be issued to
the holders of KSB Common Stock in the Merger.
ARTICLE VIII - ADDITIONAL AGREEMENTS
8.1 Stockholder Approvals. Each of Camden, CASI, KSB and the Bank shall
take, in accordance with applicable law, applicable stock exchange or NASDAQ
Stock Market rules and its charter and bylaws, all action necessary to convene,
respectively: an appropriate meeting of the stockholders of Camden to consider
and vote upon any matters required to be approved by Camden stockholders for
consummation of the Mergers (including any adjournment or postponement, the
Camden Meeting ); an appropriate meeting of the sole stockholder of CASI to
consider and vote upon the approval of this Agreement and any other matters
required to be approved by CASI s stockholder for consummation of the Mergers
(including any adjournment or postponement, the CASI Meeting); an appropriate
meeting of the stockholders of KSB to consider and vote upon the approval of
this Agreement and any other matters required to be approved by KSB's
stockholders for consummation of the Mergers (including any adjournment or
postponement, the KSB Meeting; ); an appropriate meeting of the sole
stockholder of the Bank to consider and vote upon the approval of this
Agreement and any other matters required to be approved by the Bank s
stockholder for consummation of the Mergers (including any adjournment or
postponement, the Bank Meeting; and each of the Camden Meeting, the CASI
Meeting, the KSB Meeting and the Bank Meeting, a Meeting ), as promptly as
practicable after the date hereof. The Board of Directors of each of Camden,
CASI, KSB and the Bank shall (subject to compliance with its fiduciary duties
as advised by its regular outside counsel, subsequently confirmed in writing)
recommend such approval by its respective stockholders, and each of Camden,
CASI, KSB and the Bank shall use its reasonable best efforts to solicit such
approval from its stockholders.
8.2 Registration Statement.
(a) Camden and KSB agree to cooperate in the preparation of a
registration statement on Form S-4 (the Registration Statement ) to be filed
by Camden with the SEC in connection with the issuance of Camden Common Stock
in the Merger (including the joint proxy statement and prospectus and other
proxy solicitation materials of Camden and KSB constituting a part thereof
(the Joint Proxy Statement ) and all related documents). Camden and KSB
agree to file a draft of the Joint Proxy Statement with the SEC as promptly as
practicable. Each of Camden and KSB agrees to use all reasonable efforts to
cause the Registration Statement to be filed and declared effective under the
Securities Act as promptly as reasonably practicable after the SEC has cleared
the Joint Proxy Statement. Camden also agrees to use all reasonable efforts
to obtain all necessary state securities law or blue sky permits and approvals
required to carry out the transactions contemplated by this Agreement.
(b) Each of Camden and KSB agrees, upon request, to furnish promptly
the other party with all information concerning itself, its Subsidiaries,
directors, officers and stockholders and such other matters as may be
reasonably necessary or advisable in connection with the Registration
Statement, the Joint Proxy Statement or any filing, notice or application
made by or on behalf of such other party or any of its Subsidiaries to any
regulatory authority in connection with the transactions contemplated hereby.
Each of Camden and KSB agrees, as to itself and its Subsidiaries, that none of
the information supplied or to be supplied by it for inclusion or incorporation
by reference in (i) the Registration Statement will, at the time the
Registration Statement and each amendment or supplement thereto, if any,
becomes effective under the Securities Act, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and (ii)
the Joint Proxy Statement and any amendment or supplement thereto will,
at the date of mailing to stockholders and at the times of the Camden Meeting
and the KSB Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading or any statement which, in the light of
the circumstances under which such statement is made, will be false or
misleading with respect to any material fact, or which will omit to state any
material fact necessary in order to make the statements therein not false or
misleading or necessary to correct any statement in any earlier statement in
the Joint Proxy Statement or any amendment or supplement thereto. Each of
Camden and KSB further agrees that if it shall become aware prior to the
Effective Date of any information that would cause any of the statements in the
Joint Proxy Statement to be false or misleading with respect to any material
fact, or to omit to state any material fact necessary to make the statements
therein not false or misleading, it shall promptly inform the other party
thereof and shall take the necessary steps to correct the Joint Proxy
Statement.
(c) In the case of Camden, Camden will advise KSB, promptly after
Camden receives notice thereof, of the time when the Registration Statement
has become effective or any supplement or amendment has been filed, of the
issuance of any stop order or the suspension of the qualification of the
Camden Common Stock for offering or sale in any jurisdiction, of the
initiation or threat of any proceeding for any such purpose, or of any
request by the SEC for the amendment or supplement of the Registration
Statement or for additional information.
8.3 Regulatory Matters.
(a) The parties hereto shall cooperate with each other and use
their reasonable best efforts to promptly prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings,
and to obtain as promptly as practicable all permits, consents, approvals and
authorizations of all third parties and Governmental Entities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement and the Bank Merger Agreements (including without limitation the
Merger and the Bank Merger). Camden, KSB and the Bank shall have the right
to review in advance, and to the extent practicable, each will consult the
other on, in each case subject to applicable laws relating to the exchange
of information, all the information relating to either of them, as the case
may be, and any of their respective subsidiaries, which appear in any filing
made with, or written materials submitted to, any third party or any
Governmental Entity in connection with the Merger, the Bank Merger and the
other transactions contemplated by this Agreement and by the Bank Merger
Agreements. In exercising the foregoing right, each of the parties hereto
shall act reasonably and as promptly as practicable. The parties hereto agree
that they will consult with each other with respect to the obtaining of all
permits, consents, approvals and authorizations of all third parties and
Governmental Entities necessary or advisable to consummate the Merger, the
Bank Merger and other transactions contemplated by this Agreement and the
Bank Merger Agreements and each party will keep the other apprised of
the status of matters relating to the completion of all of the transactions
contemplated hereby.
(b) Camden, KSB, CASI and the Bank shall, upon request, furnish
each other with all information concerning themselves, their respective
subsidiaries, directors, officers and stockholders and such other matters as
may be reasonably necessary or advisable in connection with any statement,
filing, notice or application made by or on behalf of Camden, KSB, CASI, the
Bank or any of their respective subsidiaries to any Governmental Entity in
connection with the Merger, the Bank Merger or the other transactions
contemplated by this Agreement and the Bank Merger Agreements.
(c) Camden, KSB, CASI and the Bank shall promptly furnish each other
with copies of written communications received by Camden or KSB, as the case
may be, or any of their respective subsidiaries, affiliates or associates (as
such terms are defined in Rule 12b-2 under the Exchange Act as in effect on the
date of this Agreement) from, or delivered by any of the foregoing to, any
Governmental Entity in respect of the Merger, the Bank Merger and the other
transactions contemplated by this Agreement and the Bank Merger Agreement.
8.4 Access to Information.
(a) Upon reasonable notice and subject to applicable laws relating
to the disclosure or exchange of information, KSB and the Bank shall afford to
the officers, employees, accountants, counsel and other representatives of
Camden, access, during normal business hours during the period prior to the
Effective Time, to all its officers, employees, agents, properties, books,
loan documentation and files, contracts, commitments and records and, during
such period, KSB and the Bank shall make available to Camden (i) a copy of each
report, schedule, registration statement and other document filed or received
by it during such period pursuant to the requirements of federal securities
laws or federal or state banking laws (other than reports or documents which
KSB or the Bank is not permitted to disclose under applicable law), (ii) copies
of all periodic reports to senior management, including, without limitation,
reports on non-performing loans and other asset quality matters and all
materials furnished to the KSB Board or the Bank Board relating to asset
quality generally, and (iii) all other information concerning the business,
properties, assets and personnel of KSB and the Bank as Camden may reasonably
request. Neither KSB nor the Bank shall be required to provide access to or
to disclose information where such access or disclosure would violate or
prejudice the rights of customers, jeopardize the attorney-client privilege
of the institution in possession or control of such information or
contravene any law, rule, regulation, order, judgment, decree, fiduciary duty
or binding agreement entered into prior to the date of this Agreement or, in
the event of any litigation or threatened litigation between KSB, the Bank
and Camden over the terms of this Agreement where access to information will
be adverse to the interests of KSB and the Bank. The parties hereto will
make appropriate substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply. Camden will hold
all such information in confidence to the extent required by, and in accordance
with, the provisions of the confidentiality agreements, dated July 1, 1999,
among Camden, KSB and the Bank (the "Confidentiality Agreement").
(b) Upon reasonable notice and subject to applicable laws relating
to the disclosure or exchange of information, Camden shall afford to the
officers, employees, accountants, counsel and other representatives of KSB,
reasonable access, during normal business hours during the period prior to
the Effective Time, to the senior executive officers of Camden and all other
available documentation reasonably requested by KSB pertaining to the
transactions contemplated hereby. It is understood, however, that Camden
shall not be required to provide access to or to disclose information where
such access or disclosure would violate or prejudice the rights of customers,
jeopardize the attorney-client privilege of the institution in possession or
control of such information or contravene any law, rule, regulation, order,
judgment, decree, fiduciary duty or binding agreement entered into prior to
the date of this Agreement or, in the event of any litigation or threatened
litigation between Camden, KSB and/or the Bank over the terms of this
Agreement where access to information will be adverse to the interests of
Camden. The parties hereto will make appropriate substitute disclosure
arrangements under circumstances in which the restrictions of the preceding
sentence apply. KSB will hold all such information in confidence to the
extent required by, and in accordance with, the provisions of the
Confidentiality Agreement.
(c) All information furnished by Camden to KSB, the Bank or its
representatives pursuant hereto shall be treated as the sole property of
Camden and, if the Merger shall not occur, KSB, the Bank and its
representatives shall return to Camden all of such written information and
all documents, notes, summaries or other materials containing, reflecting or
referring to, or derived from, such information. KSB and the Bank shall, and
shall use their reasonable best efforts to cause their representatives to,
keep confidential all such information, and shall not directly or indirectly
use such information for any competitive or other commercial purpose. The
obligation to keep such information confidential shall continue for five years
from the date the proposed Merger is abandoned and shall not apply to
(i) any information which (x) was already in KSB s or the Bank's possession
prior to the disclosure thereof by Camden; (y) was then generally known to
the public; or (z) was disclosed to KSB or the Bank by a third party not
bound by an obligation of confidentiality, or (ii) disclosures made as required
by law.
(d) No investigation by any of the parties or their respective
representatives shall affect the representations and warranties of the other
set forth herein or any condition to the obligations of the parties hereto.
8.5 No Solicitation. Neither KSB nor the Bank shall, directly or
indirectly, through any officer, director, agent or otherwise, solicit or
initiate the submission of any proposal or offer from any person relating to
any acquisition or purchase of all or (other than in the ordinary course of
business) any material portion of the assets of, or any equity interest in,
KSB or the Bank or any business combination with KSB or the Bank or, except
to the extent determined by the KSB Board, upon the written opinion of its
regular outside counsel, to be required by fiduciary obligations under
applicable law, participate in any negotiations regarding, or furnish to any
other person any information with respect to, or otherwise cooperate in any
way with, or assist or participate in, facilitate, any effort or attempt by any
other person to do or seek any of the foregoing. KSB and the Bank immediately
shall cease and cause to be terminated all existing discussions or negotiations
with any parties conducted heretofore with respect to any of the foregoing.
KSB and the Bank shall notify Camden promptly if any such proposal or offer,
or any inquiry or contact with any person with respect thereto, is made and
shall, in any such notice to Camden, indicate in reasonable detail the
identity of the person making such proposal, offer, inquiry or contact and the
terms and conditions of such proposal, offer, inquiry or contact. KSB and the
Bank agree not to release any third party from, or waive any provision of, any
confidentiality or standstill agreement to which KSB or the Bank is a party.
8.6 Employee Benefits Matters.
(a) Provision of Benefits. At the Effective Time, until
December 31, 2000, and subject to applicable law, Camden shall either
(i) maintain the existing KSB Compensation and Benefit Plans (other than
long-term care benefits, the ESOP and other stock-based benefits), or
(ii) provide the employees of KSB and the Bank ("KSB Employees") with
substantially equivalent health, life insurance, disability, retirement and
other benefits (other than long-term care benefits, the ESOP and other
stock-based benefits), if any, as presently provided by KSB to its own
employees. After December 31, 2000, and subject to applicable law, Camden
shall provide the KSB Employees with the same health, dental, pension, life
insurance, disability, 401(k) plan and other benefits, if any, as Camden
then provides generally to its similarly situated employees. With respect
to the provision of such benefits to KSB Employees pursuant hereto, to the
extent KSB Employees participate after the Effective Time in employee benefit
plans other than KSB Compensation and Benefit Plans, all prior service of such
employees with KSB or the Bank shall be recognized under such plans for all
benefit plan for purposes of eligibility and vesting, but excluding benefit
accrual under any qualified defined benefit pension plan. Camden shall not
treat any KSB Employee as a "new" employee for purposes of any exclusion
under any health plan or dental plan of Camden or any of its affiliates for
a preexisting medical condition. Nothing herein is intended or should be
construed to provide a commitment for continued employment or to confer any
rights on any officer or employee of the Bank except as herein expressly
provided.
(b) Parachute Payments. Notwithstanding anything to the contrary
contained in this Agreement, in no event shall KSB or the Bank take any action
or make any payments that would result, either individually or in the
aggregate, in the payment of an "excess parachute payment" within the
meaning of Section 280G of the Code or that would result, either individually
or in the aggregate, in payments that would be nondeductible pursuant to
Section 162(m) of the Code.
(c) Employment Agreement. The Chief Executive Officer of KSB shall
enter into an employment agreement with Camden or a Camden Affiliate on terms
mutually agreeable to both parties, with such employment agreement to take
effect at the Effective Time. The employment agreement to which the Chief
Executive Officer of KSB is a party as of the date hereof will terminate upon
the earlier of (i) execution of the employment agreement with Camden or a
Camden Affiliate, and (ii) the Effective Time.
8.7 Directors' and Officers' Insurance. Camden shall use its reasonable
best efforts to maintain in effect for three years from the Effective Time, if
available, the current directors' and officers' liability insurance policy
maintained by KSB (provided that Camden may substitute therefor policies of
at least the same coverage containing terms and conditions which are not
materially less favorable) with respect to matters occurring prior to the
Effective Time; provided, however, that in no event shall Camden be required
to expend pursuant to this Section 8.7 more than the amount equal to 125% of
the current annual amount expended by KSB to maintain or procure insurance
coverage pursuant hereto. In connection with the foregoing, KSB and the
Bank each agrees to provide such insurer or substitute insurer with such
representations as such insurer may request with respect to the reporting
of any prior claims.
In addition, Camden acknowledges that the obligations of KSB to indemnify
its directors and officers (who are made a party or threatened to be made a
party or otherwise involved with respect to any action, suit, or proceeding,
whether civil, criminal, administrative or investigative, by reason of the
fact that he or she was a director of KSB at or prior to the Effective Date)
under its Certificate of Incorporation and Bylaws, as they exist as of the date
of this Agreement, including the obligation to advance expenses, shall be
assumed by Camden by reason of the Merger.
8.8 Financial and Other Statements. Notwithstanding anything to the
contrary in Section 8.4, during the term of this Agreement, KSB, and when
required by subsection (f) hereof, Camden, shall provide to each other, in
the manner provided herein, the following documents and information:
(a) As soon as reasonably available, but in no event more than 45
days after the end of each fiscal quarter ending after the date of this
Agreement, KSB will deliver to Camden its Quarterly Report on Form 10-QSB
as filed under the Exchange Act and the Bank's Quarterly Call Report as
filed with the FDIC. As soon as reasonably available, but in no event
more than 90 days after the end of each fiscal year ending after the
date of this Agreement, KSB will deliver to Camden its Annual Report on
Form 10-KSB, as filed under the Exchange Act. KSB will also deliver to
Camden, contemporaneously with its being filed with the SEC, a copy of
all Current Reports on Form 8-KSB.
(b) Promptly upon receipt thereof, KSB will furnish to Camden copies
of all internal control reports submitted to KSB or the Bank by
independent auditors in connection with each annual, interim or special
audit of the books of KSB or the Bank made by such auditors.
(c) As soon as practicable, KSB and the Bank will furnish to Camden
copies of all such financial statements and reports as they shall send to
its stockholders, the SEC or any other Governmental Entity, to the extent
any such reports furnished to any such Governmental Entity are not
confidential and except as legally prohibited thereby.
(d) Promptly upon receipt thereof KSB will notify Camden promptly
after its receipt of each examination report of any federal or state
regulatory or examination authority with respect to the condition or
activities of KSB or the Bank.
(e) With reasonable promptness, KSB and the Bank will furnish to
Camden such additional financial data as Camden may reasonably request.
(f) As soon as reasonably available, but in no event more than 45
days after the end of each fiscal quarter ending after the date of this
Agreement, Camden will deliver to KSB its Quarterly Report on Form 10-Q
as filed under the Exchange Act and United Bank's Quarterly Call Report
as filed with the FDIC. As soon as reasonably available, but in no event
more than 90 days after the end of each fiscal year ending after the date
of this Agreement, Camden will deliver to KSB its Annual Report on Form
10-K, as filed under the Exchange Act. Camden will also deliver to KSB,
contemporaneously with its being filed with the SEC, a copy of all
Current Reports on Form 8-K.
8.9 Further Action. Camden, KSB, CASI and the Bank each shall, and shall
cause its subsidiaries to, use its reasonable best efforts (a) to take, or
cause to be taken, all actions necessary, proper or advisable to comply
promptly with all legal requirements which may be imposed on such party or its
subsidiaries with respect to the Merger or the Bank Merger and, subject to the
conditions set forth in Article IX hereof, to consummate the transactions
contemplated by this Agreement and the Bank Merger Agreements and (b) to obtain
(and to cooperate with the other party to obtain) any consent, authorization,
order or approval of, or any exemption by, any Governmental Entity and any
other third party which is required to be obtained by KSB, the Bank, Camden
or CASI or any of their respective subsidiaries in connection with the Merger
or the Bank Merger and any of the other transactions contemplated by this
Agreement.
8.10 Public Announcements. Camden, KSB, CASI and the Bank shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to this Agreement, the Bank Merger Agreements or any
transaction contemplated hereby or thereby and shall not issue any such press
release or make any such public statement prior to such consultation, except
as may be required by law or any listing agreement with a national or regional
securities exchange to which Camden or KSB is a party or any requirement of
agreement with any automated interdealer quotation system.
8.11 Additional Agreements. In case at any time after the Effective Time
any further action is necessary or desirable to carry out the purposes of this
Agreement or the Bank Merger Agreement, or to vest the Surviving Corporation or
the Bank, as applicable, with full title to all properties, assets, rights,
approvals, immunities and franchises of any of the parties to the Merger or
the Bank Merger, the proper officers and directors of each party to this
Agreement and their respective subsidiaries shall take all such necessary
action as may be reasonably requested by Camden.
8.12 Update of Disclosure Schedules. From time to time prior to the
Effective Time, KSB and Camden will promptly supplement or amend the
Disclosure Schedules to reflect any matter which, if existing, occurring or
known at the date of this Agreement, would have been required to be set forth
or described in the Disclosure Schedules or which is necessary to correct any
information in the Disclosure Schedules which has been rendered inaccurate
thereby. No supplement or amendment to the Disclosure Schedules shall have
any effect for the purpose of determining satisfaction of the conditions set
forth in Sections 9.1(a), 9.2(a) or 9.3(a) hereof, as the case may be, or the
compliance by KSB or the Bank with the covenants set forth in Article VII
hereof, or Camden or CASI with the covenants set forth in Section 7.6 and
Section 8.8 hereof.
8.13 Current Information.
(a) During the period from the date of this Agreement to the
Effective Time, KSB and the Bank will cause one or more of its designated
representatives (i) to confer on a regular and frequent basis (not less than
monthly) with representatives of Camden to report on (x) the general status
of the ongoing operations of KSB and the Bank, (y) the status of, and the
action proposed to be taken with respect to, those Loans held by KSB, the Bank
or any of their subsidiaries which, either individually or in combination with
one or more other Loans to the same borrower thereunder, have an aggregate
original principal amount of $75,000 or more and are classified or
non-performing assets, and (z) the status of, and the action proposed to be
taken with respect to, foreclosed property and other real estate owned,
and (ii) to cooperate and communicate with respect to the manner in which
the business of KSB and the Bank are conducted and the disposition of certain
assets after the Effective Time, the type and mix of products and services,
personnel matters, branch alignment, the granting of credit, and problem
loan management, reserve adequacy and accounting. In addition, KSB and the
Bank will promptly make available to Camden the reports of any independent or
third-party loan review consultant received by either KSB or the Bank. In
order to facilitate the foregoing, KSB, the Bank and Camden shall promptly
establish a liaison committee (the Liaison Committee ) which will be chaired
by an officer designated by Camden and which will meet on a regular basis to
discuss these matters and may establish sub-committees from time-to-time to
pursue various issues. During the period from the date of this Agreement to
the Effective Time, KSB and the Bank shall provide Camden prior to such
extensions with sufficient information to review new extensions of credit and
renewals having an original principal amount of more than $400,000 and
restructurings of loans having an original principal amount of more than
$75,000 and information detailing overall asset quality. The Bank shall
also allow Camden to designate one of its officers to attend the Bank s
credit committee meetings and be a non-voting attendee thereof.
(b) KSB and the Bank will promptly notify Camden of any material
change in the normal course of business or in the operation of the properties
of KSB or the Bank and of any governmental complaints, investigations or
hearings (or communications indicating that the same may be contemplated),
or the institution or the threat of material litigation involving KSB or the
Bank, and will keep Camden reasonably informed of such events.
(c) To the extent not covered by paragraphs (a) and (b) above, KSB
and the Bank shall give prompt notice to Camden, and Camden shall give prompt
notice to KSB, of (i) the occurrence, or non-occurrence, of any event the
occurrence, or non-occurrence, of which would be reasonably likely to cause
any representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect and (ii) any failure of KSB, the Bank,
Camden or CASI, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement or the Bank Merger Agreements; provided, however, that the delivery
of any notice pursuant to this paragraph (c) shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
8.14 Bank Merger.
(a) Camden and KSB shall take all actions necessary and appropriate,
including causing the entering into of appropriate merger agreements (the Bank
Merger Agreements ), to cause United Bank to merge with and into the Bank
(individually, a Bank Merger and collectively, the Bank Mergers ), as
Camden deems advisable, in each case in accordance with applicable laws and
regulations and the terms of the applicable Bank Merger Agreement at the
Effective Time or as soon as practicable after consummation of the Mergers.
(b) Unless otherwise determined by Camden prior to the Closing, at
the effective time of the Bank Merger the Articles of Organization and By-laws
of the Bank, as amended prior to the consummation of the Bank Merger, shall be
the Articles of Organization and By-laws of the surviving corporation until
thereafter amended as provided by law and such Articles of Organization and
By-laws;
(c) KSB shall be entitled to appoint the individuals listed on
Section 8.14 of the Disclosure Schedule as directors and officers of the
Bank after the effective time, each to hold office in accordance with the
Articles of Organization and By-Laws of the Bank and until their respective
successors are duly elected or appointed and qualified. The remainder of the
directors and officers of the Bank shall be appointed by Camden.
8.15 Post-Closing Governance. Camden shall take all necessary actions to
cause the size of its Board of Directors to be increased by two members,
effective as of the Subsequent Effective Time, and to cause the two members
of KSB s current Board of Directors listed on Section 8.15 of the Disclosure
Schedule to be elected to Camden s Board of Directors, such election to be
effective as of the Subsequent Effective Time.
ARTICLE IX - CONDITIONS TO THE MERGER
9.1 Conditions to Each Party's Obligations to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. This Agreement and the transactions
contemplated hereby shall have been approved and adopted by the
affirmative vote of the stockholders of KSB, the Bank, Camden and CASI,
as required;
(b) Regulatory Approvals. All necessary approvals, authorizations
and consents of all Governmental Entities required to consummate the
Mergers and the Bank Merger shall have been obtained and remain in full
force and effect, and all waiting periods relating to such approvals,
authorizations and consents shall have expired or been terminated (all
such approvals and the expiration of all such waiting periods being
referred to herein as the "Requisite Regulatory Approvals").
(c) No Orders, Injunctions or Restraints; Illegality. No order,
injunction or decree (whether temporary, preliminary or permanent) issued
by federal or state governmental authority or other agency or commission
or federal or state court of competent jurisdiction or other legal
restraint or prohibition (an "Injunction") preventing the consummation
of the Merger, the Bank Merger or any of the other transactions
contemplated by this Agreement or the Bank Merger Agreements shall be
in effect and no proceeding initiated by any governmental entity seeking
an Injunction shall be pending. No statute, rule, regulation, order,
injunction or decree (whether temporary, preliminary or permanent) shall
have been enacted, entered, promulgated or enforced by any Governmental
Authority or other agency or commission or federal or state court of
competent jurisdiction, which prohibits, restricts or makes illegal the
consummation of the Merger, the Bank Merger or any of the other
transactions contemplated by this Agreement or the Bank Merger Agreements.
(d) Effective Registration Statement. The Registration Statement
shall have become effective and no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings
for that purpose shall have been initiated or threatened by the SEC or
any other Governmental Entity.
(e) Tax Opinion Relating to the Merger. Camden shall have received
an opinion from Berry, Dunn, McNeil & Parker, and KSB shall have received
an opinion from Luse, Lehman, Gorman, Pomerenk & Schick, dated in each
case as of the Closing Date, substantially to the effect that, on the
basis of the facts, representations and assumptions set forth in such
opinions which are consistent with the state of facts existing at the
Closing Date, the Merger will be treated for federal income tax purposes
as a reorganization within the meaning of Section 368(a) of the Code.
In rendering such opinions, such counsel may require and rely upon
representations and covenants including those contained in certificates
of officers of Camden, KSB and others, reasonably satisfactory in form
and substance to such counsel.
(f) AMEX Listing. The shares of Camden Common Stock issuable
pursuant to this Agreement shall have been approved for listing on the
AMEX, subject to official notice of issuance.
(g) Accounting Treatment. Camden shall have received from Berry,
Dunn, McNeil & Parker, independent public accountants for Camden, a
letter, dated as of or shortly before the Effective Date, stating its
opinion that the Merger shall qualify for pooling of interests accounting
treatment. KSB shall have received from Berry, Dunn, McNeil & Parker,
independent public accountants for KSB, a letter, dated as of or shortly
before the Effective Date, stating its opinion that KSB is a poolable
entity.
9.2 Conditions to Obligations of Camden and CASI. The obligations of
Camden and CASI to effect the Merger are also subject to the following
conditions:
(a) Representations and Warranties. Each of the representations and
warranties of KSB and the Bank in this Agreement which is qualified as to
materiality shall be true and correct and each such representation or
warranty that is not so qualified shall be true and correct in all
material respects, in each case as of the date of this Agreement, as
applicable, and (except to the extent such representations and warranties
speak as of an earlier date) as of the Effective Time, and Camden shall
have received a certificate to such effect signed by the Chief Executive
Officer and the Chief Financial Officer of KSB and the Bank dated as of
the Effective Date.
(b) Agreements and Covenants. KSB and the Bank shall have performed
in all material respects all obligations and complied in all material
respects with all agreements or covenants of KSB and the Bank to be
performed or complied with by it at or prior to the Effective Date under
the this Agreement and the Bank Merger Agreements, and Camden shall
have received a certificate to such effect signed by the Chief Executive
Officer and Chief Financial Officer of KSB and the Bank dated as of the
Effective Date.
(c) Consents Under Agreements. The consent, approval or waiver of
each person (other than Requisite Regulatory Approvals contemplated in
Section 9.1(b)) whose consent or approval shall be required in order to
permit the lawful succession by the Surviving Corporation pursuant to the
Merger or the Bank as survivor to the Bank Merger, as the case may be, to
any material obligation, right or interest of KSB or the Bank under
agreement or instrument shall have been obtained, and none of such
permits, consents, waivers, clearances, approvals and authorizations shall
contain any term or condition which would materially impair the value of
KSB and the Bank to Camden.
(d) No Burdensome Condition. None of the Requisite Regulatory
Approvals shall impose any term, condition or restriction upon Camden,
KSB, the Surviving Corporation or the Bank or any of their respective
subsidiaries that Camden reasonably determines would materially and
adversely affect the business, operations, financial condition, property
or assets of the Surviving Corporation or the Bank as survivor to the
Bank Merger or otherwise materially impair the value of KSB or the Bank
to Camden (a "Burdensome Condition").
(e) Agreements with Officers. Agreements, substantially in the form
attached as Exhibit D hereto, shall have been executed and delivered by
all directors and officers of KSB or the Bank who own, or for purposes
of Rule 13d-3 under the Exchange Act would be deemed to beneficially
own, as of the date of this Agreement, shares of KSB Common Stock.
(f) Legal Opinion. Camden shall have received the opinion of
counsel to KSB and the Bank, dated the Closing Date, in customary form
and mutually agreeable to the parties.
9.3 Conditions to Obligations of KSB and the Bank. The obligations of
KSB and the Bank to effect the Merger are also subject to the following
conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Camden and CASI in this Agreement which is qualified as to
materiality shall be true and correct and each such representation or
warranty that is not so qualified shall be true and correct in all
material respects, in each case as of the date of this Agreement and
(except to the extent such representations and warranties speak as of an
earlier date) as of the Effective Date and KSB shall have received a
certificate signed by the Chief Executive or Chief Financial Officer of
Camden to such effect dated as of the Effective Date.
(b) Agreements and Covenants. Camden and CASI shall have performed
in all material respects all obligations and complied in all material
respects with all of the respective agreements or covenants to be
performed or complied by such party under this Agreement and KSB shall
have received a certificate signed by the Chief Executive or Chief
Financial Officer of Camden to such effect dated as of the Effective Date.
(c) Legal Opinion. KSB shall have received the opinion of counsel
to Camden and CASI, dated the Closing Date, in customary form and mutually
agreeable to the parties.
ARTICLE X - TERMINATION, AMENDMENT AND WAIVER
10.1 Termination. This Agreement may be terminated and the Merger, the
Bank Merger and the other transactions contemplated by this Agreement or the
Bank Merger Agreements may be abandoned at any time prior to the Effective
Time, notwithstanding any requisite approval and adoption of this Agreement
and the transactions contemplated in this Agreement by the stockholders of KSB:
(a) by mutual written consent duly authorized by the Boards of
Directors of Camden, CASI, KSB and the Bank;
(b) by either Camden and CASI or KSB and the Bank if (i) the
Effective Time shall not have occurred on or before July 1, 2000;
provided, however, that the right to terminate this Agreement under this
Section 10.1(b) shall not be available to any party whose failure to
fulfill any material obligation under this Agreement has been the cause
of, or resulted in, the failure of the Effective Time to occur on or
before such date;
(c) by either Camden and CASI or KSB and the Bank (i) forty-five
days after the date on which any request or application for a regulatory
approval required to consummate the Merger or the Bank Merger shall have
been denied or withdrawn at the request or recommendation of the
Governmental Entity which must grant such requisite regulatory approval,
unless within the forty-five day period following such denial or
withdrawal a petition for rehearing or an amended application has been
filed with such Governmental Entity; provided, however, that no party
shall have the right to terminate this Agreement pursuant to this Section
10.1(c) (i) if such denial or request or recommendation for withdrawal
shall be due to the failure of the party seeking to terminate this
Agreement to perform or observe the covenants and agreements of such
party set forth herein or (ii) if any court of competent jurisdiction
or other Governmental Entity shall have issued an order, decree, ruling
or taken any other action restraining, enjoining or otherwise prohibiting
the Merger or the Bank Merger and such order, decree, ruling or other
action shall have become final and nonappealable;
(d) by either Camden and CASI or KSB and the Bank (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall
have been a material breach of any of the representations or warranties
set forth in this Agreement on the part of the other party, which breach
by its nature cannot be cured prior to the Effective Time or within thirty
business days following receipt by the breaching party of written notice
of such breach from the other party hereto;
(e) by either Camden and CASI or KSB and the Bank (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall
have been a material breach of any of the covenants or agreements set
forth in this Agreement on the part of the other party, which breach shall
not have been cured within thirty business days following receipt by the
breaching party of written notice of such breach from the other party
hereto;
(f) by Camden and CASI or KSB and the Bank (provided, that if the
terminating party is KSB or the Bank, KSB and the Bank shall not be in
material breach of any of their obligations under Section 8.1) if any
approval of the stockholders of KSB required for the consummation of the
Merger shall not have been obtained by reason of the failure to obtain
the required vote at a duly held meeting of stockholders or at any
adjournment or postponement thereof;
(g) by Camden, if KSB Board shall not have publicly recommended to
the stockholders of KSB that such stockholders vote in favor of the
approval of this Agreement, the Merger and the other transactions
contemplated hereby or shall have withdrawn, modified or amended such
recommendation in a manner adverse to Camden;
(h) by KSB, if the Board of Directors of Camden shall not have
publicly recommended to the stockholders of Camden that such stockholders
vote in favor of the approval of this Agreement, the Merger and the other
transactions contemplated hereby or shall have withdrawn, modified or
amended such recommendation in a manner adverse to KSB;
(i) by the Board of Directors of KSB, upon written notice to Camden,
at any time during the five day period commencing two days after the
Determination Date (as defined below), if both the following conditions
are satisfied:
(i) the Average Closing Price of Camden Common Stock on the
Determination Date is less than $15.75 (such amount is referred to
herein, as the Camden Floor Price ); and
(ii) (A) the quotient obtained by dividing the Average Closing
Price of Camden Common Stock on the Determination Date by Camden's
Starting Date Closing Price (the Camden Ratio ) is less than (B)
the quotient obtained by dividing the Index Price as of the
Determination Date by the Index Price as of the Starting Date and
subtracting 0.15 from the quotient in this clause (ii)(B) (such
number being referred to herein as the Camden Index Ratio ).
Notwithstanding the foregoing provisions of this Section 10.1(i), if KSB
elects to exercise its termination right pursuant to this Section 10.1(i) it
shall give prompt written notice to Camden; provided, however, that such
notice of election to terminate may be withdrawn by KSB at any time within
the above-referenced five-day period. In the event that KSB gives notice of
its intention to exercise the termination provisions of this Section 10.1(i),
Camden shall have the option, exercisable within five (5) business days receipt
thereof, to increase the Exchange Ratio to equal the lesser of (i) a number
(rounded to four decimals) equal to a quotient, the numerator of which the
Camden Floor Price multiplied by the Exchange Ratio (as then in effect) and
the denominator of which is the Average Closing Price of Camden Common Stock,
and (ii) a number (rounded to four decimals) equal to a quotient, the
numerator of which is the Camden Index Ratio multiplied by the Exchange Ratio
(as then in effect) and the denominator of which is the Camden Ratio. If
Camden elects to exercise its option to increase the consideration in
accordance with the terms of the previous sentence within the aforementioned
five business day period, it shall give prompt written notice to KSB of such
election and the revised Exchange Ratio, whereupon no termination shall have
occurred pursuant to this Section 10.1(i), and this Agreement shall remain in
effect in accordance with its terms (except the Exchange Ratio shall have been
modified), and any references in this Agreement to Exchange Ratio shall
thereafter be deemed to refer to the Exchange Ratio as so adjusted.
For purposes of this Section 10.1, the following terms shall have the
meanings indicated:
Average Closing Price means the average of the daily last sale prices of
Camden Common Stock as reported on the AMEX (as reported in The Wall Street
Journal or, if not reported therein, in another mutually agreed upon
authoritative source) for the fifteen consecutive full trading days in which
such shares are traded on the AMEX ending at the close of trading on the
Determination Date.
Determination Date means the date on which the last Requisite Regulatory
Approval required for consummation of the Merger shall be received.
Index Group means the bank holding companies listed below, the common
stock of all of which shall be publicly traded as to which there shall not
have been, since the Starting Date and before the Determination Date, an
announcement of a proposal for such company to be merged with another
unaffiliated company, acquired by an unaffiliated company or for such
company to acquire another unaffiliated company or companies in transactions
with an aggregate value exceeding 10% of the acquiror s market capitalization
as of the Starting Date. In the event that the common stock of any such
company ceases to be publicly traded or any such announcement is made with
respect to any such company, such company will be removed from the Index
Group, and the weights (which have been determined based on the number of
outstanding shares of common stock) redistributed proportionately for purposes
of determining the Index Price. The bank holding companies and the weights
attributed to them are set forth on Exhibit B hereto.
Index Price on a given date means the weighted average (weighted in
accordance with the factors listed above) of the closing prices on such date
of the companies comprising the Index Group.
Starting Date means the last full day on which the AMEX was open for
trading prior to the execution of this Agreement.
If Camden or any company belonging to the Index Group declares or effects
a stock dividend, reclassification, recapitalization, split-up, combination,
exchange of shares or similar transaction between the Starting Date and the
Determination Date, the prices for the common stock of such company shall be
appropriately adjusted for the purposes of applying this Section 10.1(i).
10.2 Effect of Termination; Expenses.
(a) In the event of the termination of this Agreement pursuant to
Section 10.1, this Agreement shall forthwith become void, and there shall be
no liability on the part of any party hereto, except (i) as set forth in
Section 7.3, this Section 10.2 or Section 11.2 and (ii) nothing herein shall
relieve any party from any liabilities or damages arising out of its gross
negligence or willful breach of any provision of this Agreement.
(b) If this Agreement is terminated as a result of any breach of a
representation, warranty, covenant or other agreement which is caused by the
gross negligence or willful breach of a party hereto, such party shall be
liable to the other party for all out-of-pocket costs and expenses, including,
without limitation, the reasonable fees and expenses of lawyers, accountants
and investment bankers, incurred by such other party in connection with the
entering into of this Agreement and the carrying out of any and all acts
contemplated hereunder ("Expenses"). The payment of Expenses is not an
exclusive remedy, but is in addition to any other rights or remedies available
to the parties hereto at law or in equity.
(c) As a condition of Camden's willingness, and in order to induce
Camden, to enter into this Agreement and to reimburse Camden for incurring the
costs and expenses related to entering into this Agreement and consummating
the transactions contemplated by this Agreement, the Bank will make a cash
payment to Camden of $1,000,000 (the "Expense Fee"), which shall be subject
to reduction at the election of Camden (as described below), if (i) Camden
has terminated this Agreement pursuant to Section 10.1(g), (ii) Camden has
terminated this Agreement pursuant to Section 10.1(d) or Section 10.1(e), and
the breach of the representation, warranty, covenant or other agreement was
caused by the gross negligence or willful misconduct of KSB or the Bank, or
(iii) KSB or the Bank has breached any of the provisions of Section 8.5;
provided, however, that Camden shall not be entitled to receive the
Expense Fee if either Camden or CASI has failed to fulfill any material
obligation under this Agreement and such failure has been the cause of, or
resulted in, the termination of this Agreement pursuant to Section 10.1.
Notwithstanding anything herein or in the KSB Option Agreement to the
contrary, in no event shall the aggregate amount of the Expense Fee actually
paid to Camden and the Total Profit (as defined in the KSB Option Agreement)
actually received by Camden upon exercise or waiver of any of its rights under
the KSB Option Agreement exceed $1,400,000 (the Maximum Fee ). In the event
that Camden would be entitled to receive, pursuant to the terms of the
preceding sentence and/or the KSB Option Agreement, an aggregate amount that
exceeds the Maximum Fee, Camden may elect, in its sole discretion, to
(y) reduce the Expense Fee payable by KSB to Camden, or (z) relinquish a
portion of the Option or Option Shares (as such terms are defined in the KSB
Option Agreement), or elect to effect any combination of clause y or clause
z above, such that the aggregate of the Expense Fee payable to Camden and
the Total Profit receivable by Camden would not exceed the Maximum Fee.
Any payment required under this Section 10.2(c) will be (i) payable by KSB
and the Bank to Camden (by wire transfer of immediately available funds to an
account designated by Camden) within five business days after demand by Camden
and (ii) net of any other payments made by KSB and the Bank to Camden pursuant
to the provisions of Section 10.2(b).
(d) Except as otherwise provided in this Section 10.2, all costs and
expenses incurred in connection with this Agreement, the Bank Merger Agreements
and the transactions contemplated hereby and thereby shall be paid by the party
incurring such expenses, whether or not any of the transactions contemplated
by this Agreement is consummated.
10.3 Amendment. This Agreement may be amended by the parties hereto by
action taken by or on behalf of their respective Boards of Directors at any
time prior to the Effective Time; provided, however, that, after the approval
and adoption of this Agreement and the transactions contemplated hereby, no
amendment may be made which would reduce the amount or change the type of
consideration into which each share of KSB Common Stock shall be converted
upon consummation of the Merger. This Agreement, including the provisions of
this Section 10.3, may not be amended except by an instrument in writing signed
by the parties hereto.
10.4 Waiver. At any time prior to the Effective Time, any party hereto
may (i) extend the time for the performance of any obligation or other act of
any other party hereto, (ii) waive any inaccuracy in the representations and
warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any of the agreements or conditions contained
herein; provided, however, that after the approval and adoption of this
Agreement and the approval of the transactions contemplated hereby by the
stockholders of KSB there may not be, without further approval of such
stockholders, any extension or waiver of this Agreement or any portion
thereof which would reduce the amount or change the form of the consideration
into which each share of KSB Common Stock shall be converted upon consummation
of the Merger delivered to KSB's stockholders hereunder other than as
contemplated by this Agreement. Any such extension or waiver shall be valid
if set forth in an instrument in writing signed by the party or parties to be
bound thereby, but such extension or waiver or failure to insist on strict
compliance with an obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
ARTICLE XI - GENERAL PROVISIONS
11.1 Alternative Structure. Notwithstanding anything to the contrary
contained in this Agreement, prior to the Effective Time, Camden shall be
entitled to revise the structure of the Merger, the Bank Merger and the
other transactions contemplated hereby and thereby, provided, that (i) there
are no material adverse federal or state income tax consequences to KSB, the
Bank and its stockholders as a result of the modification; (ii) the
consideration to be paid to the holders of the shares of KSB Common Stock
under this Agreement is not thereby changed in kind or reduced in amount;
(iii) there are no material adverse changes to the benefits and other
arrangements provided to or on behalf of KSB s and the Bank s directors,
officers and other employees; and (iv) such modification will not be likely
to delay materially or jeopardize receipt of any required regulatory approvals
or other consents and approvals relating to the consummation of the Merger and
the Bank Merger. This Agreement and any related documents shall be
appropriately amended in order to reflect any such revised structure.
11.2 Non-Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements in this Agreement shall terminate
at the Effective Time or upon the termination of this Agreement pursuant to
Section 10.1, as the case may be, except that the agreements set forth in
Articles II and III and Sections 8.6, 8.7, 8.14(c) and 8.15 shall survive
the Effective Time indefinitely and those set forth in the last sentence of
Section 8.4(a) and in Sections 8.4(b), Article X and Article XI hereof shall
survive termination indefinitely.
11.3 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, telegram or telex or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 11.3):
if to Camden or CASI:
Camden National Corporation
2 Elm Street
Camden, ME 04843
Facsimile:
Attention: Robert W. Daigle
with a copy to:
Goodwin, Procter & Hoar LLP
One Exchange Place
Boston, MA 02109
Facsimile: (617) 523-1231
Attention: William P. Mayer, Esq.
Stephen A. Boyko, Esq.
if to KSB or the Bank:
KSB Bancorp, Inc.
Main Street
Kingfield, Maine 04947
Facsimile:
Attention: John C. Witherspoon
with a copy to:
John J. Gorman, Esq.
Luse, Lehman, Gorman, Pomerenk & Schick
5335 Wisconsin Avenue, N.W.
Washington, D.C. 20015
Facsimile: (202) 362-2902
11.4 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any manner adverse to any party. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated by this
Agreement be consummated as originally contemplated to the fullest extent
possible.
11.5 Entire Agreement. This Agreement (including the Disclosure Schedule
and the Exhibits) and the KSB Option Agreement constitute, and the Bank Merger
Agreements when the same are executed by Camden and the Bank will constitute,
the entire agreement among the parties with respect to the subject matter
hereof and supersede all prior agreements and undertakings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof except for the Confidentiality Agreement.
11.6 Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto
(whether by operation of law or otherwise) without the prior written consent
of the other parties. Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
11.7 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person
(other than the directors and director nominees referenced in Sections 8.7,
8.14(c) and 8.15) any right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement.
11.8 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event that the provisions contained in this
Agreement were 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 thereof 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.
11.9 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Maine applicable to contracts
executed in and to be performed in that State. All actions and proceedings
arising out of or relating to this Agreement shall be heard and determined
in any state or federal court sitting in Augusta, Maine.
11.10 Headings. The table of contents and descriptive headings contained
in this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
11.11 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits, Annexes or Schedules, such reference shall be to a
Section of or Exhibit, Annex or Schedule to this Agreement unless otherwise
indicated. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation." The phrases "the date of this Agreement," "the date hereof"
and terms of similar import, unless the context otherwise requires, shall be
deemed to be July 27, 1999.
11.12 Counterparts. This Agreement may be executed (including by
facsimile) in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed shall be deemed to be
an original but all of which taken together shall constitute one and the same
agreement.
<PAGE>
IN WITNESS WHEREOF, Camden, CASI, KSB and the Bank have caused
this Agreement to be executed as a sealed instrument as of the date first
written above by their respective officers thereunto duly authorized.
Attest: CAMDEN NATIONAL CORPORATION
s/ Susan M. Westfall By: s/ Robert W. Daigle
Secretary Title: President
Attest: CAMDEN ACQUISITION SUBSIDIARY, INC.
s/ Susan M. Westfall By: s/ Robert W. Daigle
Secretary Title: President
Attest: KSB BANCORP, INC.
s/ John E. Thien By: s/ John C. Witherspoon
Chief Financial Officer Title: President
Attest: KINGFIELD SAVINGS BANK
s/ John E. Thien By: s/ John C. Witherspoon
Chief Financial Officer Title: President
Exhibit A-1
Form of Affiliate Letter to Camden
Camden National Corporation
2 Elm Street
Camden, Maine 04843
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed to be an
affiliate of KSB Bancorp, Inc., a Delaware corporation ( KSB ), as the term
affiliate is (i) defined for purposes of paragraphs (c) and (d) of Rule 145
of the Rules and Regulations (the Rules and Regulations ) promulgated by the
Securities and Exchange Commission (the Commission ) under the Securities Act
of 1933, as amended (the Act ), and/or (ii) used in and for purposes of
Accounting Series Releases 130 and 135, as amended, of the Commission. I have
been further advised that pursuant to the terms of the Agreement and Plan of
Merger dated as of July 27, 1999 (the Merger Agreement ), between Camden
National Corporation, ( Camden ), Camden Acquisition Subsidiary, Inc. ( CASI ),
KSB and Kingfield Savings Bank (the Bank ), KSB will be merged with and into
Camden (the Merger ) and, that as a result of the Merger, I may receive shares
of Camden Common Stock (as defined in the Merger Agreement) in exchange for
shares of KSB Common Stock (as defined in the Merger Agreement) owned by me.
Accordingly, I hereby represent, warrant and covenant to Camden that in
the event I receive any Camden Common Stock as a result of the Merger:
a. I shall not make any sale, transfer or other disposition of the
Camden Common Stock in violation of the Act or the Rules and
Regulations.
b. I have carefully read this letter and the Merger Agreement and
discussed its requirements and other applicable limitations upon my
ability to sell, transfer or otherwise dispose of Camden Common Stock
to the extent I believed necessary with my counsel or counsel for
KSB.
c. I have been advised that the issuance of Camden Common Stock to me
pursuant to the Merger will be registered with the Commission under
the Act pursuant to a Registration Statement on Form S-4. However,
I have also been advised that, since at the time the Merger will be
submitted for a vote of the stockholders of KSB, I may be deemed to
have been an affiliate of KSB and the distribution by me of the
Camden Common Stock has not been registered under the Act, I may
not sell, transfer or otherwise dispose of Camden Common Stock issued
to me in the Merger unless (i) such sale, transfer or other
disposition has been registered under the Act, (ii) such sale,
transfer or other disposition is made in conformity with the volume
and other limitations of Rule 145 promulgated by the Commission under
the Act, or (iii) in the opinion of counsel reasonably acceptable to
Camden and its counsel, such sale, transfer or other disposition is
otherwise exempt from registration under the Act.
d. I understand that Camden is under no obligation to register the sale,
transfer or other disposition of the Camden Common Stock by me or on
my behalf under the Act or to take any other action necessary in
order to make compliance with an exemption from such registration
available.
e. I also understand that stop transfer instructions will be given to
Camden's transfer agent(s) with respect to the Camden Common Stock
and that there will be placed on the certificates for the Camden
Common Stock issued to me, or any substitutions therefor, a legend
in substantially the following form:
The securities represented by this certificate have been
issued in a transaction to which Rule 145 promulgated under
the Securities Act of 1933 applies and may only be sold or
otherwise transferred in compliance with the requirements of
Rule 145 or pursuant to a registration statement under said
act or an exemption from such registration.
f. I also understand that unless the transfer by me of my Camden Common
Stock has been registered under the Act or is a sale made in
conformity with the provisions of Rule 145, Camden reserves the right
to place a legend on the certificates issued to my transferee in
substantially the following form:
The shares represented by this certificate have not been
registered under the Securities Act of 1933 and were acquired
from a person who received such shares in a transaction to
which Rule 145 promulgated under the Securities Act of 1933
applies. The shares have been acquired by the holder not
with a view to, or for resale in connection with, any
distribution thereof within the meaning of Securities Act of
1933 and may not be sold, pledged or otherwise transferred
except in accordance with an exemption from the registration
requirements of the Securities Act of 1933.
It is understood and agreed that this letter agreement shall terminate and
be of no further force or effect and the legends set forth in paragraphs (e)
and (f) above shall be removed by delivery of substitute certificates without
such legend and the related stop transfer restrictions shall be lifted
forthwith, if (i) any such shares of Camden Common Stock shall have been
registered under the Act for sale, transfer or other disposition by me or on
my behalf and are sold, transferred or otherwise disposed of, or (ii) any such
shares of Camden Common Stock are sold in accordance with the provisions of
paragraphs (c), (e), (f) and (g) of Rule 144 promulgated under the Act, or
(iii) I am not at the time an affiliate of Camden and have been the beneficial
owner of the Camden Common Stock for at least one year (or such other period as
may be prescribed by the Act and the rules and regulations promulgated
thereunder), and Camden has filed with the Commission all of the reports it
is required to file under the Securities Exchange Act of 1934, as amended,
during the preceding twelve months, or (iv) I am not and have not been for at
least three months an affiliate of Camden and have been the beneficial owner of
Camden Common Stock for at least two years (or such period as may be prescribed
by the Act and the rules and regulations promulgated thereunder), or (v) Camden
shall have received a letter from the staff of the Commission, or an opinion of
counsel reasonably acceptable to Camden, to the effect that the stock transfer
restrictions and the legend are not required.
I further represent to and covenant with Camden that from the date that is
thirty (30) days prior to the Effective Time (as defined in the Merger
Agreement) I will not sell, transfer or otherwise dispose of, or reduce the
risk of ownership with respect to, shares of KSB Common Stock or Camden Common
Stock held by me and that I will not sell, transfer or otherwise dispose of, or
reduce the risk of ownership with respect to, any shares of Camden Common Stock
received by me in the Merger or other shares of Camden Common Stock until after
such time as financial results covering at least thirty (30) days of combined
operations of Camden and KSB have been published by Camden, in the form of
a quarterly earnings report, an effective registration statement filed with
the Commission, a report to the Commission on Form 10-K, 10-Q, or 8-K, or any
other public filing or announcement which includes the financial results of at
least thirty (30) days of combined operations; provided, however, that excluded
from the foregoing undertaking shall be such sales, pledges, transfers or other
dispositions of shares of KSB Common Stock or shares of Camden Common Stock
which are individually and in the aggregate de minimis within the meaning of
Topic 2-E of the Commission s Staff Accounting Bulletin Series.
In addition, I represent to and covenant with Camden that from and after
the date hereof until such time as financial results covering at least thirty
(30) days of combined operations of Camden and KSB have been published by
Camden as provided above, I shall not purchase or otherwise acquire, nor sell,
transfer or otherwise dispose of, any shares of Camden Common Stock or KSB
Common Stock without the prior written consent of Robert W. Daigle, of Camden,
which consent shall only be withheld to preserve pooling of interests
accounting treatment of the Merger or in accordance with applicable laws.
Very truly yours,
____________________________________
Name:
Accepted this ___ day of
____________, 199_ by
CAMDEN NATIONAL CORPORATION
By:_________________________________
Name:
Title:
Exhibit A-2
Form of Affiliate Letter to KSB
KSB Bancorp, Inc.
Main Street
Kingfield, Maine 04947
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed to be an
affiliate of Camden National Corporation, a Maine corporation ( Camden ), as
the term affiliate is used in and for purposes of Accounting Series Releases
130 and 135, as amended, of the Securities and Exchange Commission (the
Commission ). I have been further advised that pursuant to the terms of the
Agreement and Plan of Merger dated as of July 27, 1999 (the Merger Agreement ),
by and among Camden, Camden Acquisition Subsidiary, Inc., a Delaware
corporation and wholly owned subsidiary of Camden ( CASI ), KSB Bancorp., a
Delaware corporation ( KSB ) and Kingfield Savings Bank (the Bank ), KSB will
be, through a series of transactions, merged with and into Camden (the Merger).
I represent to and covenant with KSB that from the date that is thirty
(30) days prior to the Effective Time (as defined in the Merger Agreement)
until such time as financial results covering at least thirty (30) days of
combined operations of Camden and KSB have been published by Camden, in the
form of a quarterly earnings report, an effective registration statement filed
with the Commission, a report to the Commission on Form 10-K, 10-Q, or 8-K, or
any other public filing or announcement which includes the financial results of
at least thirty (30) days of combined operations, I will not sell, transfer or
otherwise dispose of, or reduce the risk of ownership with respect to, shares
of Camden Common Stock (as defined in the Merger Agreement) or KSB Common Stock
(as defined in the Merger Agreement) held by me; provided, however, that
excluded from the foregoing undertaking shall be such sales, pledges, transfers
or other dispositions of shares of Camden Common Stock or shares of KSB Common
Stock which are individually and in the aggregate deminimis within the meaning
of Topic 2-E of the Commission s Staff Accounting Bulletin Series.
In addition, I represent to and covenant with KSB that from and after the
date hereof until such time as financial results covering at least thirty (30)
days of combined operations of Camden and KSB have been published by Camden as
provided above, I shall not purchase or otherwise acquire, nor sell, transfer
or otherwise dispose of, any shares of Camden Common Stock or KSB Common
Stock without the prior written consent of Robert W. Daigle, of Camden, which
consent shall only be withheld to preserve pooling of interests accounting
treatment of the Merger or in accordance with applicable laws.
Very truly yours,
____________________________________
Name:
Accepted this ___ day of
____________, 199_ by
KSB BANCORP, INC.
By:_________________________________
Name:
Title:
EXHIBIT B
CAMDEN NATIONAL CORPORATION
COMPARABLE INSTITUTIONS
- -------------------------------------------------------------------------------
Market Value
as of 7/21 or Shares
Holding Company Tickler most recent Outstanding
prior close (# mil)
- -------------------------------------------------------------------------------
1 ACNB CORPORATION ACNB $18.500 5.783
2 ARROW FINANCIAL CORPORATION AROW $25.875 6.149
3 ATLANTIC BANK & TRUST COMPANY ATLB $16.500 4.139
4 BAR HARBOR BANKSHARES BHB $20.375 3.444
5 BOSTON PRIVATE FINANCIAL HOLDINGS, INC. BPFH $ 8.000 10.813
6 CCBT BANCORP, INC. CCBT $18.250 8.971
7 CENTURY BANCORP, INC. CNBKA $18.750 5.822
8 CITIZENS & NORHTERN CORPORATION CZNC $30.875 5.272
9 COMMUNITY BANKS, INC. CTY $21.250 6.846
10 DROVERS BANCSHARES CORPORATION DROV $22.875 4.696
11 FIRST NATIONAL LINCOLN CORP FNLC $20.500 2.470
12 FIRST OF LONG ISLAND CORPORATION (THE) FLIC $36.875 3.093
13 GRANITE STATE BANKSHARES, INC. GSBI $24.000 5.870
14 INTERCHANGE FINANCIAL SERVICES CORPORATION ISB $19.375 7.214
15 MERCHANTS BANCSHARES, INC. MBVT $23.500 4.239
16 PENNROCK FINANCIAL SERVICES CORP. PRFS $22.250 5.998
17 WASHINGTON TRUST BANCOPR, INC. WASH $17.375 10.119
- -------------------------------------------------------------------------------
INDEX Weighted Average $20.149
Camden National Corporation CAC $20.000
Information obtained from Bloomberg 7/22/99
- -------------------------------------------------------------------------------
EXHIBIT C
BANK MERGER AGREEMENT
AGREEMENT AND PLAN OF MERGER, dated as of February _____, 2000 (the
Agreement ), pursuant to Section 352 of Title 9-B of the Maine Revised Statutes
by and between UNITED BANK, a banking corporation duly organized under the laws
of the State of Maine ( United Bank ), and KINGFIELD SAVINGS BANK, a Maine-
chartered stock savings bank (the Bank ).
WHEREAS, Camden National Corporation ( Camden ), Camden Acquisition
Subsidiary, Inc., KSB Bancorp, Inc. ( KSB ) and the Bank are parties to an
Agreement and Plan of Merger, dated as of July ____, 1999, as such agreement
may be subsequently amended or modified (the Acquisition Agreement ),
providing for, among other things, the merger of KSB with and into Camden
(the Merger ) and the subsequent merger of United Bank with and into the
Bank (the Bank Merger );
WHEREAS, United Bank and the Bank desire that as promptly as practicable
following the consummation of the Merger, United Bank be merged with and into
the Bank upon the terms and conditions contained in this Agreement so that,
upon consummation of the Bank Merger, the separate corporate existence of
United Bank shall cease and the Bank shall continue as the surviving bank of
the Bank Merger;
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, United Bank and the Bank hereby
agree as follows:
ARTICLE I
The Bank Merger
1.01 The Bank Merger. The constituent corporations to the Bank Merger
shall be United Bank and the Bank. As promptly as practicable following
consummation of the Merger, receipt of the required approval of the
Superintendent of the Maine Bureau of Banking (the Maine Superintendent ),
approval of the stockholders of each of United Bank and the Bank, receipt of
all of the required regulatory approvals and the expiration of all waiting
periods related to such approvals, the Bank Merger shall be effected pursuant
to which United Bank shall merge with and into the Bank. As a result of the
Bank Merger, the separate corporate existence of United Bank shall cease and
the Bank shall continue as the surviving bank of the Bank Merger (the
Surviving Bank ). At the Effective Time (as defined in Section 1.04), all
of the rights, privileges, powers, franchises, properties and assets of United
Bank and the Bank shall be vested in the Surviving Bank, and all debts,
liabilities, obligations, restrictions, disabilities and duties of United
Bank and the Bank shall become the debts, liabilities, obligations,
restrictions and duties of the Surviving Bank.
1.02 Name of Surviving Bank. The name of the Surviving Bank shall be
[_______________].
1.03 Capital Stock. Unless otherwise determined by Camden prior to the
Effective Time by delivery to the Bank of an addendum to this Agreement, from
and after the Effective Time, the total number of shares of all classes of
capital stock that the Surviving Bank is authorized to issue is [_______]
million shares of common stock, par value $0.01 per share (the Common Stock).
The outstanding capital stock of the Surviving Bank shall be $[_______]
represented by [_______] shares of Common Stock.
1.04 Effective Time. The Bank Merger shall be effected by (i) the filing
of this executed Agreement, together with the certified resolutions of the
constituent stockholders approving it, with the Maine Superintendent, and
(ii) the granting of approval of the Agreement and Bank Merger by the Maine
Superintendent. The term Effective Time shall mean 11:59 p.m. on
February ____, 2000, and shall be evidenced by the Maine Superintendent's
issuance of a certificate to the Surviving Bank reflecting the Bank Merger.
1.05 Articles. The articles of incorporation of the Bank, as amended in
the manner set forth in Section 1.05 of Annex A hereto, shall be the articles
of incorporation of the Surviving Bank (the Articles ) until further amended
as provided therein and by applicable law.
1.06 By-laws. The by-laws of the Bank, as amended in the manner set forth
in Section 1.06 of Annex A hereto, shall be the by-laws of the Surviving Bank
until thereafter amended as provided therein or in the Articles of the
Surviving Bank, as amended from time to time, or by applicable law.
1.07 Locations. The main office and established and authorized branches
of United Bank shall become the established and authorized branches of the
Surviving Bank and the main office and established and authorized branches of
the Bank shall become the main office and established and authorized branches
of the Surviving Bank, all as set forth in Section 1.07 of Annex A hereto.
1.08 Directors and Officers.
(a) At the Effective Time, the initial directors of the Surviving
Bank shall be those persons whose respective names, addresses and occupations
are set forth in Section 1.08(a) of Annex A hereto, each to hold office in
accordance with, and the service of such director shall be subject to the
provisions of, the Articles and by-laws of the Surviving Bank, as amended
from time to time.
(b) At the Effective Time, the initial officers of the Surviving
Bank shall be those persons whose respective names and addresses are set forth
in Section 1.08(b) of Annex A hereto, each to hold office in accordance with,
and the service of such officer shall be subject to the provisions of, the
Articles and by-laws of the Surviving Bank, as amended from time to time.
1.09 Committees of Board of Directors of Surviving Bank. The Committees
of the Board of Directors of the Surviving Bank and the persons who shall serve
on such committees shall be determined by the Board of Directors of the
Surviving Bank in accordance with its by-laws.
1.10 Additional Actions. If, at any time after the Effective Time, the
Surviving Bank shall consider or be advised that any further assignments or
assurances in law or any other acts are necessary or desirable (a) to vest,
perfect or confirm, of record or otherwise, in the Surviving Bank, title to
and possession of any property or right of United Bank acquired or to be
acquired by reason of, or as a result of, the Bank Merger, or (b) otherwise
to carry out the purposes of this Agreement, United Bank and its proper
officers and directors shall be deemed to have granted to the Surviving
Bank an irrevocable power of attorney to execute and deliver all such proper
deeds, assignments and assurances in law and to do all acts necessary or
proper to vest, perfect or confirm title to and possession of such property
or rights in the Surviving Bank and otherwise to carry out the purposes of
this Agreement; and the proper officers and directors of the Surviving Bank
are fully authorized in the name of United Bank or otherwise to take any and
all such action.
ARTICLE II
Cancellation of Shares
Each share of common stock, par value $0.01 per share, of United Bank
issued and outstanding immediately prior to the Effective Time shall, by
virtue of the Bank Merger and without any action on the part of the holder
thereof be canceled without receipt of any consideration thereof by United
Bank.
ARTICLE III
Representations
Each of United Bank and the Bank represents that this Agreement has been
duly authorized, executed and delivered by such party and constitutes a legal,
valid and binding obligation of such party, enforceable against it in
accordance with the terms hereof.
ARTICLE IV
Termination
Consummation of the Bank Merger contemplated hereunder is conditioned upon
the consummation of the Merger as provided in the Merger Agreement. This
Agreement shall terminate and forthwith become void automatically and without
any action on the part of United Bank or the Bank immediately upon the
termination of the Merger Agreement in accordance with Article X thereof, and
there shall be no further liability on the part of United Bank or the Bank upon
such termination.
IN WITNESS WHEREOF, United Bank and the Bank have each caused this
Agreement to be executed by their duly authorized officers, as under seal, as
of the day and year first above written.
Attest: UNITED BANK
By:
Name:
Title:
By:
Name:
Title:
Attest: KINGFIELD SAVINGS BANK
By:
Name:
Title:
By:
Name:
Title:
EXHIBIT D
VOTING AGREEMENT
Date: July 27, 1999
Camden National Corporation
Camden Acquisition Subsidiary, Inc.
2 Elm Street
Camden, Maine 04843
Ladies and Gentlemen:
The undersigned (the "Stockholder") beneficially owns and has sole or
shared voting power with respect to the number of shares of the common stock,
par value $.01 per share (the "Shares"), of KSB Bancorp, Inc., a Delaware
corporation (the Company ), indicated opposite the Stockholder's name on
Schedule 1 attached hereto.
Simultaneously with the execution of this letter agreement, Camden
Acquisition Subsidiary, Inc. ("Purchaser"), Camden National Corporation, a
Maine corporation ( Parent ), the Company and Kingfield Savings Bank, a Maine
chartered savings bank and a wholly-owned subsidiary of the Company (the Bank),
are entering into an Agreement and Plan of Merger (the "Merger Agreement")
providing, among other things, for the merger (the Merger ) of the Company
with and into Parent, which, as of a date immediately preceding the Merger,
will own all of the issued and outstanding stock of Purchaser. The undersigned
understands that Purchaser and Parent have undertaken and will continue to
undertake substantial expenses in connection with the negotiation and execution
of the Merger Agreement and the subsequent actions necessary to consummate the
Merger and the other transactions contemplated by the Merger Agreement.
In consideration of, and as a condition to, Purchaser's and Parent's
entering into the Merger Agreement, and in consideration of the expenses
incurred and to be incurred by Purchaser and Parent in connection therewith,
the Stockholder, Purchaser and Parent agree as follows:
1. Agreement to Vote in Favor of Merger. The Stockholder (a) shall vote
or cause to be voted all of the Shares that such Stockholder shall be entitled
to so vote, whether such Shares are beneficially owned by such Stockholder on
the date of this letter agreement or are subsequently acquired, at the special
or any other meeting of the Company's stockholders to be called and held
following the date hereof, in favor of the approval of the Merger Agreement
and the Merger and (b) shall vote or cause to be voted all such Shares, at
such special meeting or any other meeting of the Company's stockholders
following the date hereof, against the approval of any other agreement
providing for a merger, acquisition, consolidation, sale of a material amount
of assets or other business combination of the Company or the Bank with any
person or entity other than Purchaser, Parent or their respective affiliates;
except, in the case of either (a) or (b), to the extent required by applicable
law relating to fiduciary obligations of directors upon the advice of its
regular outside counsel, subsequently confirmed in writing.
2. Restrictions on Sale or Other Disposition of Shares. The Stockholder
will not sell, assign, transfer or otherwise dispose of (including, without
limitation, by the creation of a Lien (as defined in paragraph 3 below)), or
permit to be sold, assigned, transferred or otherwise disposed of, any Shares
owned by the Stockholder, whether such Shares are held by the Stockholder on
the date of this letter agreement or are subsequently acquired, except
(a) transfers by will or by operation of law, in which case this letter
agreement shall bind the transferee, (b) transfers pursuant to any pledge
agreement, subject to the pledgee agreeing in writing to be bound by the terms
of this letter agreement, (c) transfers in connection with estate planning
purposes, including transfers to relatives, trusts and charitable
organizations, subject to the transferee agreeing in writing to be bound by
the terms of this letter agreement, and (d) transfers to any other stockholder
of the Company who has executed a copy of this letter agreement on the date
hereof with respect to some or all of the Shares held by such stockholder.
The Stockholder shall cause the Company to cause its transfer agent to
note on its records for the Company (in whatever form maintained) that such
Shares are subject to the restrictions on voting and transfer set forth herein,
and at Parent s reasonable request, the Stockholder shall have any existing
certificates subject to this Agreement canceled and reissued bearing the
following legend:
"THIS CERTIFICATE, AND THE SHARES REPRESENTED
HEREBY, ARE SUBJECT TO CERTAIN VOTING AND TRANSFER
RESTRICTIONS CONTAINED IN A VOTING AGREEMENT BY AND
AMONG KSB BANCORP, INC., CAMDEN NATIONAL
CORPORATION AND CAMDEN ACQUISITION SUBSIDIARY, INC.
AND THE BENEFICIAL OWNER OF THESE SHARES AND MAY BE
TRANSFERRED ONLY IN COMPLIANCE THEREWITH. COPIES
OF THE ABOVE-REFERENCED AGREEMENT ARE ON FILE AT
THE OFFICES OF KSB BANCORP, INC."
3. Representations. The Stockholder represents that the Stockholder has
the complete and unrestricted power and the unqualified right to enter into and
perform the terms of this letter agreement. The Stockholder further represents
that this letter agreement constitutes a valid and binding agreement with
respect to the Stockholder, enforceable against the Stockholder in accordance
with its terms. Except as set forth on Schedule 1, the Stockholder represents
that the Stockholder beneficially owns the number of Shares indicated opposite
such Stockholder's name on said Schedule 1, free and clear of any liens,
claims, charges or other encumbrances or restrictions of any kind whatsoever
("Liens"), and has sole or shared, and otherwise unrestricted, voting power
with respect to such Shares.
4. Term. Notwithstanding anything herein to the contrary, the
agreements contained herein shall remain in full force and effect until the
earlier of (i) the consummation of the Merger or (ii) the termination of the
Merger Agreement in accordance with Article X thereof.
5. Equitable Remedies. The Stockholder has signed this letter agreement
intending to be bound thereby. The Stockholder expressly agrees that this
letter agreement shall be specifically enforceable in any court of competent
jurisdiction in accordance with its terms against the Stockholder. All of the
covenants and agreements contained in this letter agreement shall be binding
upon, and inure to the benefit of, the respective parties and their permitted
successors, assigns, heirs, executors, administrators and other legal
representatives, as the case may be.
6. Miscellaneous. This letter agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which
together shall constitute one and the same instrument. No waivers of any
breach of this letter agreement extended by Purchaser and Parent to the
Stockholder shall be construed as a waiver of any rights or remedies of
Purchaser and Parent with respect to any other stockholder of the Company
who has executed a copy of this letter agreement with respect to Shares held
by such stockholder or with respect to any subsequent breach of the
Stockholder or any other such stockholder of the Company. This letter
agreement is deemed to be signed as a sealed instrument and is to be governed
by the laws of the State of Maine, without giving effect to the principles of
conflicts of laws thereof. If any provision hereof is deemed unenforceable,
the enforceability of the other provisions hereof shall not be affected.
Please confirm our agreement by signing a copy of this letter.
Very truly yours,
Name:
AGREED TO AND ACCEPTED
AS OF JULY ___, 1999
CAMDEN NATIONAL CORPORATION
CAMDEN ACQUISITION SUBSIDIARY, INC.
By:
Schedule 1
Name of
Stockholder
Number of Shares
Beneficially Owned
Shares
Subject to Pledge
THE TRANSFER OF THIS AGREEMENT IS SUBJECT TO
CERTAIN PROVISIONS CONTAINED HEREIN AND TO
RESALE RESTRICTIONS UNDER THE
SECURITIES ACT OF 1933, AS AMENDED
STOCK OPTION AGREEMENT, dated as of July 27, 1999, by and between KSB
Bancorp, Inc., a Delaware corporation ( Issuer ), and Camden National
Corporation, a Maine corporation ( Grantee ).
WITNESSETH:
WHEREAS, Issuer and Grantee have entered into an Agreement and Plan of
Merger dated as of the date hereof (as amended from time to time, the Merger
Agreement ), which agreement has been executed by the parties hereto
immediately prior to the execution of this Stock Option Agreement (this
Agreement ); and
WHEREAS, as a condition to Grantee s entering into the Merger Agreement
and in consideration therefor, Issuer has agreed to grant Grantee the Option
(as hereinafter defined);
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein and in the Merger Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. (a) Issuer hereby grants to Grantee an unconditional, irrevocable
option (the Option ) to purchase, subject to the terms hereof, up to 262,932
fully-paid and nonassessable shares of Issuer s Common Stock, par value $.01
per share ( KSB Common Stock ), at a price per share equal to $13.50 (the
Option Price ); provided, however, that in no event shall the number of shares
of KSB Common Stock for which this Option is exercisable exceed 19.9% of the
Issuer's issued and outstanding shares of KSB Common Stock without giving
effect to any shares subject to or issued pursuant to the Option. The number
of shares of KSB Common Stock that may be received upon the exercise of the
Option and the Option Price are subject to adjustment as herein set forth.
(b) In the event that any additional shares of KSB Common Stock are
either (i) issued or otherwise become outstanding after the date of this
Agreement (other than pursuant to this Agreement), or (ii) redeemed,
repurchased, retired or otherwise cease to be outstanding after the date of
this Agreement, the number of shares of KSB Common Stock subject to the
Option shall be increased or decreased, as appropriate, so that, after such
issuance, such number equals 19.9% of the number of shares of KSB Common
Stock then issued and outstanding without giving effect to any shares subject
or issued pursuant to the Option. Nothing contained in this Section 1(b) or
elsewhere in this Agreement shall be deemed to authorize Issuer or Grantee to
breach any provision of the Merger Agreement.
2. (a) Holder (as hereinafter defined) may exercise the Option, in
whole or part, and from time to time, if, but only if, both an Initial
Triggering Event (as hereinafter defined) and a Subsequent Triggering Event
(as hereinafter defined) shall have occurred prior to the occurrence of an
Exercise Termination Event (as hereinafter defined), provided that Holder
shall have sent to Issuer written notice of such exercise (as provided in
subsection (e) of this Section 2) within 90 days following such Subsequent
Triggering Event. Each of the following shall be an Exercise Termination
Event : (i) the Effective Time (as defined in the Merger Agreement) of the
Merger; (ii) termination of the Merger Agreement in accordance with the
provisions thereof if such termination occurs prior to the occurrence of an
Initial Triggering Event, except a termination by Grantee pursuant to Section
10.1(d) or Section 10.1 (e) of the Merger Agreement (unless the breach by
Issuer giving rise to such right of termination is nonvolitional); or (iii)
the passage of 12 months after termination of the Merger Agreement if such
termination follows the occurrence of an Initial Triggering Event or is a
termination by Grantee pursuant to Section 10.1(d) or Section 10.1(e) of the
Merger Agreement (unless the breach by Issuer giving rise to such right of
termination is nonvolitional). The term Holder shall mean the holder or
holders of the Option from time to time, and which is initially Grantee.
(b) The term Initial Triggering Event shall mean any of the
following events or transactions occurring after the date hereof:
(i) Issuer or any of its Subsidiaries (each, an Issuer
Subsidiary ), without having received Grantee s 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 Grantee or any of its Subsidiaries
(each a Grantee Subsidiary ), or the Board of Directors of Issuer shall have
recommended that the stockholders of Issuer approve or accept any Acquisition
Transaction. For purposes of this Agreement, Acquisition Transaction shall
mean (w) a merger, consolidation or similar transaction, involving Issuer or
any Significant Subsidiary (as defined in Rule 1-02 of Regulation S-X
promulgated by the Securities and Exchange Commission (the SEC )) of Issuer,
(x) a purchase, lease or other acquisition or assumption of all or a
substantial portion of the consolidated assets or consolidated deposits of
Issuer or any Significant Subsidiary of Issuer, (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
Issuer, or (z) any substantially similar transaction; provided, however, that
in no event shall (A) the transactions contemplated by the Merger Agreement
or the entering into of the Merger Agreement constitute an Acquisition
Transaction or (B) any merger, consolidation, purchase or similar transaction
involving only the Issuer 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 such transaction is not entered into in violation of
the terms of the Merger Agreement;
(ii) Issuer or any Issuer Subsidiary, without having received
Grantee's prior written consent, shall have authorized, recommended, proposed,
or publicly announced its intention to authorize, recommend or propose, an
Acquisition Transaction with any person other than Grantee or a Grantee
Subsidiary, or the Board of Directors of Issuer shall have publicly withdrawn
or modified, or publicly announced its intention to withdraw or modify, in
any manner adverse to Grantee, its recommendation that the stockholders of
Issuer approve the transactions contemplated by the Merger Agreement in
anticipation of engaging in an Acquisition Transaction with any person other
than Grantee or Grantee Subsidiary, or the Board of Directors of Issuer shall
have publicly announced its intention not to recommend that the stockholders
of Issuer approve the transactions contemplated by the Merger Agreement
because of or in connection with an actual or proposed Acquisition Transaction
involving any person other than Grantee or Grantee Subsidiary;
(iii) Any person other than Grantee, any Grantee Subsidiary
or any Issuer Subsidiary acting in a fiduciary capacity in the ordinary course
of its business shall have acquired beneficial ownership or the right to
acquire beneficial ownership of 10% or more of the outstanding shares of KSB
Common Stock (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);
(iv) Any person other than Grantee or any Grantee Subsidiary
shall have made a bona fide proposal to Issuer or its stockholders by public
announcement or written communication that is or becomes the subject of
public disclosure to engage in an Acquisition Transaction;
(v) After an overture is made by any person other than Grantee
or any Grantee Subsidiary to Issuer or its stockholders to engage in an
Acquisition Transaction, Issuer shall have breached any covenant or obligation
contained in the Merger Agreement and such breach (x) would entitle Grantee to
terminate the Merger Agreement and (y) shall not have been cured prior to the
Notice Date (as defined below); or
(vi) Any person other than Grantee or any Grantee Subsidiary,
other than in connection with a transaction to which Grantee has given its
prior written consent, shall have filed an application or notice with [the
Board of Governors of the Federal Reserve System (the Federal Reserve Board )],
or other federal or state bank regulatory authority, which application or
notice has been accepted for processing, for approval to engage in an
Acquisition Transaction.
(c) The term Subsequent Triggering Event shall mean either of the
following events or transactions occurring after the date hereof:
(i) The acquisition by any person of beneficial ownership of
20% or more of the then outstanding KSB Common Stock; or
(ii) The occurrence of the Initial Triggering Event described in
paragraph (i) of subsection (b) of this Section 2, except that the percentage
referred to in clause (y) thereof shall be 20%.
(d) Issuer shall notify Grantee promptly in writing of the
occurrence of any Initial Triggering Event or Subsequent Triggering Event of
which Issuer has notice (together, a Triggering Event ), it being understood
and agreed that the giving of such notice by Issuer shall not be a condition
to the right of Holder to exercise the Option.
(e) In the event Holder is entitled to and wishes to exercise the
Option, it shall send to Issuer a written notice (the date of which being
herein referred to as the Notice Date ) specifying (i) the total number of
shares of KSB Common Stock it will purchase pursuant to such exercise and
(ii) a place and date not earlier than five business days nor later than 60
business days from the Notice Date for the closing of such purchase (the
Closing Date ); provided that if prior notification to or approval of the
Federal Reserve Board or any other governmental authority or regulatory
agency is required in connection with such purchase, Holder and Issuer shall
promptly file the required notice, form 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 periods have expired or been terminated or such approvals
have been obtained and any requisite waiting period or periods shall have
passed. Any exercise of the Option shall be deemed to occur on the Notice
Date relating thereto.
(f) At the closing referred to in subsection (e) of this Section 2,
Holder shall pay to Issuer the aggregate purchase price for the shares of KSB
Common Stock purchased pursuant to the exercise of the Option in immediately
available funds by wire transfer to a bank account designated by Issuer,
provided that failure or refusal of Issuer to designate such a bank account
shall not preclude Holder from exercising the Option.
(g) At such closing, simultaneously with the delivery of the
purchase price as provided in subsection (f) of this Section 2, Issuer shall
deliver to Holder a certificate or certificates representing the number of
shares of KSB Common Stock purchased by Holder and, if the Option shall have
been exercised in part only, a new Option evidencing the rights of Holder
thereof to purchase the balance of the shares of KSB Common Stock purchasable
hereunder, and Holder shall deliver to Issuer a copy of this Agreement. By
receipt of any shares of KSB Common Stock issuable hereunder Holder will
agree, and does hereby agree, not to offer to sell or otherwise dispose of
such shares in violation of the Securities Act of 1933, as amended (the
1933 Act ), other applicable law or the provisions of this Agreement.
(h) In addition to any other legend that may be required by
applicable law, certificates for shares of KSB Common Stock delivered at a
closing hereunder may be endorsed with a restrictive legend that shall read
substantially as follows:
The transfer of the shares represented by this certificate is
subject to certain provisions of an agreement between the
registered holder hereof and Issuer and to resale restrictions
arising under the Securities Act of 1933, as amended. A copy of
such agreement is on file at the principal office of Issuer and
will be provided to the holder hereof without charge upon receipt
by Issuer of a written request therefor.
It is understood and agreed that (i) the reference to the resale restrictions
of the 1933 Act, in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if Holder shall have delivered to Issuer
a copy of a letter from the staff of the SEC, or an opinion of counsel, in form
and substance reasonably satisfactory to Issuer and its counsel, to the effect
that such legend is not required for purposes of the 1933 Act; (ii) the
reference to the provisions of this Agreement in the above legend shall be
removed by delivery of substitute certificate(s) without such reference if
the shares have been sold or transferred in compliance with the provisions
of this Agreement and under circumstances that do not require the retention
of such reference; and (iii) the legend shall be removed in its entirety if
the conditions in the preceding clauses (i) and (ii) are both satisfied.
(i) Upon the giving by Holder to Issuer of the written notice of
exercise of the Option provided for under subsection (e) of this Section 2
and the tender of the applicable purchase price under subsection (f) of this
Section 2, Holder shall be deemed to be the holder of record of the shares of
KSB Common Stock issuable upon such exercise, notwithstanding that the stock
transfer books of Issuer shall then be closed or that certificates
representing such shares of KSB Common Stock shall not then be actually
delivered to Holder. Issuer shall pay all expenses, and any and all United
States federal, state and local taxes and other charges that may be payable
in connection with the preparation, issue and delivery of stock certificates
under this Section 2 in the name of Holder or its assignee, transferee or
designee.
3. Issuer agrees: (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
KSB Common Stock so that the Option may be exercised without additional
authorization of KSB Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase KSB Common
Stock; (ii) that it will not, by charter amendment 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 Issuer; (iii) that it shall promptly take all action as may
from time to time be required (including (x) complying with all premerger
notification, reporting and waiting period requirements specified in
15 U.S.C. Section 18a and regulations promulgated thereunder and (y) in the
event, under the Bank Holding Company Act of 1956, as amended (the BHCA ),
or the Change in Bank Control Act of 1978, as amended, or any state banking
law, prior approval of or notice to the Federal Reserve Board or to any state
regulatory authority is necessary before the Option may be exercised,
cooperating fully with the Holder in preparing such applications or notices
and providing such information to the Federal Reserve Board or such state
regulatory authority as they may require) in order to permit Holder to
exercise the Option and Issuer duly and effectively to issue shares of KSB
Common Stock pursuant hereto; and (iv) that it shall promptly take all
action provided herein to protect the rights of Holder against dilution and
otherwise hereunder.
4. This Agreement and the Option granted hereby are exchangeable,
without expense, at the option of Holder, upon presentation and surrender of
this Agreement at the principal office of Issuer, for other Agreements
providing for Options of different denominations entitling the holder thereof
to purchase, on the same terms and subject to the same conditions as are set
forth herein, in the aggregate the same number of shares of KSB Common Stock
purchasable hereunder. The terms Agreement and Option as used herein
include any Stock Option Agreements and related Options for which this
Agreement (and the Option granted hereby) may be exchanged. Upon receipt by
Issuer of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of loss, theft
or destruction) of reasonably satisfactory indemnification, and upon surrender
and cancellation of this Agreement, if mutilated, Issuer will execute and
deliver a new Agreement of like tenor and date. Any such new Agreement
executed and delivered shall constitute an additional contractual obligation
on the part of Issuer, whether or not the Agreement so lost, stolen, destroyed
or mutilated shall at any time be enforceable by anyone.
5. In addition to the adjustment in the number of shares of KSB Common
Stock that are purchasable upon exercise of the Option pursuant to Section 1
of this Agreement, the number of shares of KSB Common Stock purchasable upon
the exercise of the Option and the Option Price shall be subject to adjustment
from time to time as provided in this Section 5. In the event of any change
in, or distributions in respect of, the KSB Common Stock by reason of
stock dividends, split-ups, mergers, recapitalizations, combinations,
subdivisions, conversions, exchanges of shares, distributions on or in
respect of the KSB Common Stock that would be prohibited under the terms of
the Merger Agreement, or the like, the type and number of
securities purchasable upon exercise hereof and the Option Price shall be
appropriately adjusted in such manner as shall fully preserve the economic
benefits provided hereunder and proper provision shall be made in any
agreement governing any such transaction to provide for, and the inclusion
and validity of such provision shall be a condition to, the validity and
consummation of any such transaction, such proper adjustment and the full
satisfaction of the Issuer s obligations hereunder.
6. Upon the occurrence of a Subsequent Triggering Event that occurs
prior to an Exercise Termination Event, Issuer shall, at the request of
Grantee delivered within 90 days of such Subsequent Triggering Event
(whether on its own behalf or on behalf of any subsequent holder of this
Option (or part thereof) or any of the shares of KSB Common Stock issued
pursuant hereto), promptly prepare, file and keep current a shelf registration
statement under the 1933 Act covering any shares issued and issuable pursuant
to this Option and shall use its reasonable best efforts to cause such
registration statement to become effective and remain current in order to
permit the sale or other disposition of any shares of KSB Common Stock issued
upon total or partial exercise of this Option ( Option Shares ) in accordance
with any plan of disposition requested by Grantee. Issuer will use its
reasonable best efforts to cause such registration statement promptly to
become effective and then to remain effective for a period of 180 days from
the day such registration statement first becomes effective or such shorter
time as may be reasonably necessary to effect such sales or other dispositions.
Grantee shall have the right to demand two such registrations. The foregoing
notwithstanding, if, at the time of any request by Grantee for registration
of the Option or Option Shares as provided above, Issuer is in registration
with respect to an underwritten public offering of shares of KSB Common
Stock, and if in the good faith judgment of the managing underwriter or
managing underwriters, or, if none, the sole underwriter or underwriters, of
such offering the inclusion of Holder s Option or Option Shares would interfere
with the successful marketing of the shares of KSB Common Stock offered by
Issuer, the number of Option Shares otherwise to be covered in the registration
statement contemplated hereby may be reduced; provided, however, that after
any such required reduction the number of Option Shares to be included in
such offering for the account of Holder shall constitute at least 25% of the
total number of shares to be sold by Holder and Issuer in the aggregate; and
provided further, however, that if such reduction occurs, then the Issuer
shall file a registration statement for the balance as promptly as practical
and no reduction shall thereafter occur. Each such Holder shall provide
all information reasonably requested by Issuer for inclusion in any
registration statement to be filed hereunder. If requested by any such
Holder in connection with such registration, Issuer shall 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 in secondary offering
underwriting agreements for the Issuer. Upon receiving any request under
this Section 6 from any Holder, Issuer agrees to send a copy thereof to any
other person known to Issuer to be entitled to registration rights under
this Section 6, in each case by promptly mailing the same, postage prepaid, to
the address of record of the persons entitled to receive such copies.
Notwithstanding anything to the contrary contained herein, in no event shall
Issuer be obligated to effect more than two registrations pursuant to this
Section 6 by reason of the fact that there shall be more than one Grantee as
a result of any assignment or division of this Agreement.
7. (a) Immediately prior to the occurrence of a Repurchase Event (as
defined below), (i) following a request of Holder, delivered prior to an
Exercise Termination Event, Issuer (or any successor thereto) shall repurchase
the Option from Holder at a price (the Option Repurchase Price ) equal to the
amount by which (A) the Market/Offer Price (as defined below) exceeds (B) the
Option Price, multiplied by the number of shares for which this Option may
then be exercised and (ii) at the request of the owner of Option Shares from
time to time (the Owner ), delivered within 90 days of such occurrence (or
such later period as provided in Section 11), Issuer shall repurchase such
number of Option Shares from the Owner as the Owner shall designate at a
price (the Option Share Repurchase Price ) equal to the Market/Offer Price
multiplied by the number of Option Shares so designated. The term Market/Offer
Price shall mean the highest of (i) the price per share of KSB Common Stock
at which a tender offer or exchange offer therefor has been made, (ii) the
price per share of KSB Common Stock to be paid by any third party pursuant
to an agreement with Issuer, (iii) the highest closing price for shares of
KSB Common Stock within the six-month period immediately preceding the date
Holder gives notice of the required repurchase of this Option or the Owner
gives notice of the required repurchase of Option Shares, as the case may be,
and (iv) in the event of a sale of all or a substantial portion of Issuer s
assets, the sum of the price paid in such sale for such assets and the
current market value of the remaining assets of Issuer as determined by a
nationally recognized investment banking firm selected by Holder or the Owner,
as the case may be, and reasonably acceptable to the Issuer, divided by the
number of shares of KSB Common Stock of Issuer 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 Holder or Owner, as the case may be, and reasonably
acceptable to the Issuer.
(b) Holder and the Owner, as the case may be, may exercise its right
to require Issuer to repurchase the Option and any Option Shares pursuant to
this Section 7 by surrendering for such purpose to Issuer, at its principal
office, a copy of this Agreement or certificates for Option Shares, as
applicable, accompanied by a written notice or notices stating that Holder
or the Owner, as the case may be, elects to require Issuer to repurchase this
Option and/or the Option Shares in accordance with the provisions of this
Section 7. Prior to the later to occur of (x) five business days after the
surrender of the Option and/or certificates representing Option Shares and
the receipt of such notice or notices relating thereto and (y) the time that
is immediately prior to the occurrence of a Repurchase Event, Issuer shall
deliver or cause to be delivered to Holder the Option Repurchase Price and/or
to the Owner the Option Share Repurchase Price therefor or the portion thereof,
if any, that Issuer is not then prohibited under applicable law and regulations
from so delivering.
(c) To the extent that Issuer is prohibited under applicable law or
regulation from repurchasing the Option and/or the Option Shares in full,
Issuer shall immediately so notify Holder and/or the Owner and thereafter
deliver or cause to be delivered, from time to time, to Holder and/or the
Owner, as appropriate, the portion of the Option Repurchase Price and the
Option Share Repurchase Price, respectively, that it is no longer prohibited
from delivering, within five business days after the date on which Issuer is
no longer so prohibited; provided, however, that if Issuer at any time after
delivery of a notice of repurchase pursuant to paragraph (b) of this Section 7
is prohibited under applicable law or regulation from delivering, to Holder
and/or the Owner, as appropriate, the Option Repurchase Price and the
Option Share Repurchase Price, respectively, in full (and Issuer hereby
undertakes to use its best efforts to obtain all required regulatory and
legal approvals and to file any required notices, in each case as promptly
as practicable in order to accomplish such repurchase), Holder or Owner may
revoke its notice of repurchase of the Option or the Option Shares either
in whole or to the extent of the prohibition, whereupon, in the latter case,
Issuer shall promptly (i) deliver to Holder and/or the Owner, as appropriate,
that portion of the Option Repurchase Price or the Option Share Repurchase
Price that Issuer is not prohibited from delivering; and (ii) deliver, as
appropriate, either (A) to Holder, a new Stock Option Agreement evidencing
the right of Holder to purchase that number of shares of KSB Common
Stock obtained by multiplying the number of shares of KSB Common Stock for
which the surrendered Agreement was exercisable at the time of delivery of
the notice of repurchase by a fraction, the numerator of which is the Option
Repurchase Price less the portion thereof theretofore delivered to Holder and
the denominator of which is the Option Repurchase Price, or (B) to the Owner,
a certificate for the Option Shares it is then so prohibited from
repurchasing.
(d) For purposes of this Section 7, a Repurchase Event shall be
deemed to have occurred upon either (i) the consummation of any merger,
consolidation or similar transaction involving Issuer or any purchase, lease
or other acquisition of all or a substantial portion of the assets of Issuer,
other than any such transaction which would not constitute an Acquisition
Transaction pursuant to the provisos to Section 2(b)(i), or (ii) the
acquisition by any person of beneficial ownership of 50% or more of the then
outstanding shares of KSB Common Stock, provided that no such event shall
constitute a Repurchase Event unless a Subsequent Triggering Event shall
have occurred prior to an Exercise Termination Event. The parties hereto
agree that Issuer s obligations to repurchase the Option or Option Shares under
this Section 7 shall not terminate upon the occurrence of an Exercise
Termination Event unless no Subsequent Triggering Event shall have occurred
prior to the occurrence of an Exercise Termination Event. Prior to the
occurrence of any Repurchase Event, the Issuer shall notify in writing the
Holder and each Owner of such Repurchase Event.
8. (a) In the event that prior to an Exercise Termination Event, Issuer
shall enter into an agreement (i) to consolidate with or merge into any person,
other than Grantee or one of its Subsidiaries, and shall not be the continuing
or surviving corporation of such consolidation or merger, (ii) to permit any
person, other than Grantee or one of its Subsidiaries, to merge into Issuer
and Issuer shall be the continuing or surviving corporation, but, in connection
with such merger, the then outstanding shares of KSB Common Stock shall be
changed into or exchanged for stock or other securities of any other person
or cash or any other property or the then outstanding shares of KSB Common
Stock shall after such merger represent less than 50% of the outstanding
voting shares and voting share equivalents of the merged company, or (iii)
to sell or otherwise transfer all or substantially all of its assets to any
person, other than Grantee or one of its Subsidiaries, then, and in each such
cases the agreement governing such transaction shall make proper provision
so that the Option shall, upon the consummation of any such transaction and
upon the terms and conditions set forth herein, be converted into, or exchanged
for, an option (the Substitute Option ), at the election of Holder, of either
(x) the Acquiring Corporation (as hereinafter defined) or (y) any person that
controls the Acquiring Corporation.
(b) The following terms have the meanings indicated:
(i) Acquiring Corporation shall mean (i) the continuing or
surviving corporation of a consolidation or merger with Issuer (if other than
Issuer), (ii) Issuer in a merger in which Issuer is the continuing or surviving
person, and (iii) the transferee of all or substantially all of Issuer s assets.
(ii) Substitute KSB Common Stock shall mean the KSB Common
Stock issued by the issuer of the Substitute Option upon exercise of the
Substitute Option.
(iii) Assigned Value shall mean the Market/Offer Price, as
defined in Section 7.
(iv) Average Price shall mean the average closing price of a
share of the Substitute KSB Common Stock for the one year immediately preceding
the consolidation, merger or sale in question, but in no event higher than the
closing price of the shares of Substitute KSB Common Stock on the day preceding
such consolidation, merger or sale; provided that if Issuer is the issuer of
the Substitute Option, the Average Price shall be computed with respect to a
share of KSB Common Stock issued by the person merging into Issuer or by any
company which controls or is controlled by such person, as Holder may elect.
(c) The Substitute Option shall have the same terms as the Option;
provided, that if the terms of the Substitute Option cannot, for legal reasons,
be the same as the Option, such terms shall be as similar as possible to those
of the Option and in no event less advantageous to Holder of the Option. The
issuer of the Substitute Option shall also enter into an agreement with the
then Holder or Holders of the Substitute Option in substantially the same form
as this Agreement, which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of
shares of Substitute KSB Common Stock as is equal to the Assigned Value
multiplied by the number of shares of KSB Common Stock for which the Option
is then exercisable, divided by the Average Price. The exercise price of the
Substitute Option per share of Substitute KSB Common Stock shall be equal to
the Option Price multiplied by a fraction, the numerator of which shall be the
number of shares of KSB Common Stock for which the Option is then exercisable
and the denominator of which shall be the number of shares of Substitute KSB
Common Stock for which the Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs, shall
the Substitute Option be exercisable for more than 19.9% of the shares of
Substitute KSB Common Stock outstanding prior to exercise of the Substitute
Option. In the event that the Substitute Option would be exercisable for
more than 19.9% of the shares of Substitute KSB Common Stock outstanding
prior to exercise but for this clause (e), the issuer of the Substitute Option
(the Substitute Option Issuer ) shall make a cash payment to Holder equal to
the excess of (i) the value of the Substitute Option without giving effect to
the limitation in this clause (e) over (ii) the value of the Substitute Option
after giving effect to the limitation in this clause (e). This difference in
value shall be determined by a nationally recognized investment banking firm
selected by Holder or the Owner, as the case may be, and reasonably acceptable
to the Acquiring Corporation.
(f) Issuer shall not enter into any transaction described in
subsection (a) of this Section 8 unless the Acquiring Corporation and any
person that controls the Acquiring Corporation assume in writing all the
obligations of Issuer hereunder.
9. (a) At the request of the holder of the Substitute Option (the
Substitute Option Holder ), the Substitute Option Issuer shall repurchase the
Substitute Option from the Substitute Option Holder at a price (the
Substitute Option Repurchase Price ) equal to (x) the amount by which
(i) the Highest Closing Price (as hereinafter defined) exceeds (ii) the
exercise price of the Substitute Option, multiplied by the number of shares of
Substitute KSB Common Stock for which the Substitute Option may then be
exercised plus (y) Grantee s reasonable out-of-pocket expenses (to the extent
not previously reimbursed), and at the request of the owner (the Substitute
Share Owner ) of shares of Substitute KSB Common Stock (the Substitute Shares),
the Substitute Option Issuer shall repurchase the Substitute Shares at a
price (the Substitute Share Repurchase Price ) equal to (x) the Highest
Closing Price multiplied by the number of Substitute Shares so designated
plus (y) Grantee s reasonable out-of-pocket expenses (to the extent not
previously reimbursed). The term Highest Closing Price shall mean the
highest closing price for shares of Substitute KSB Common Stock within the
six-month period immediately preceding the date the Substitute Option Holder
gives notice of the required repurchase of the Substitute Option or the
Substitute Share Owner gives notice of the required repurchase of the
Substitute Shares, as applicable.
(b) The Substitute Option Holder and the Substitute Share Owner, as
the case may be, may exercise its respective right to require the Substitute
Option Issuer to repurchase the Substitute Option and the Substitute Shares
pursuant to this Section 9 by surrendering for such purpose to the Substitute
Option Issuer, at its principal office, the agreement for such Substitute
Option (or, in the absence of such an agreement, a copy of this Agreement)
and certificates for Substitute Shares accompanied by a written notice or
notices stating that the Substitute Option Holder or the Substitute Share
Owner, as the case may be, elects to require the Substitute Option Issuer to
repurchase the Substitute Option and/or the Substitute Shares in accordance
with the provisions of this Section 9. As promptly as practicable, and in
any event within five business days after the surrender of the Substitute
Option and/or certificates representing Substitute Shares and the receipt of
such notice or notices relating thereto, the Substitute Option Issuer shall
deliver or cause to be delivered to the Substitute Option Holder the Substitute
Option Repurchase Price and/or to the Substitute Share Owner the Substitute
Share Repurchase Price therefor or, in either case, the portion thereof which
the Substitute Option Issuer is not then prohibited under applicable law and
regulation from so delivering.
(c) To the extent that the Substitute Option Issuer is prohibited
under applicable law or regulation from repurchasing the Substitute Option
and/or the Substitute Shares in part or in full, the Substitute Option Issuer
following a request for repurchase pursuant to this Section 9 shall immediately
so notify the Substitute Option Holder and/or the Substitute Share Owner and
thereafter deliver or cause to be delivered, from time to time, to the
Substitute Option Holder and/or the Substitute Share Owner, as appropriate,
the portion of the Substitute Share Repurchase Price, respectively, which it
is no longer prohibited from delivering, within five business days after the
date on which the Substitute Option Issuer is no longer so prohibited;
provided, however, that if the Substitute Option Issuer is at any time after
delivery of a notice of repurchase pursuant to subsection (b) of this Section 9
prohibited under applicable law or regulation from delivering to the Substitute
Option Holder and/or the Substitute Share Owner, as appropriate, the Substitute
Option Repurchase Price and the Substitute Share Repurchase Price,
respectively, in full (and the Substitute Option Issuer shall use its best
efforts to obtain all required regulatory and legal approvals, in each case as
promptly as practicable, in order to accomplish such repurchase), the
Substitute Option Holder or Substitute Share Owner may revoke its notice of
repurchase of the Substitute Option or the Substitute Shares either in whole
or to the extent of the prohibition, whereupon, in the latter case, the
Substitute Option Issuer shall promptly (i) deliver to the Substitute Option
Holder or Substitute Share Owner, as appropriate, that portion of the
Substitute Option Repurchase Price or the Substitute Share Repurchase Price
that the Substitute Option Issuer is not prohibited from delivering; and
(ii) deliver, as appropriate, either (A) to the Substitute Option Holder, a
new Substitute Option evidencing the right of the Substitute Option Holder
to purchase that number of shares of the Substitute KSB Common Stock obtained
by multiplying the number of shares of the Substitute KSB Common Stock for
which the surrendered Substitute Option was exercisable at the time of delivery
of the notice of repurchase by a fraction, the numerator of which is the
Substitute Option Repurchase Price less the portion thereof theretofore
delivered to the Substitute Option Holder and the denominator of which is the
Substitute Option Repurchase Price, or (B) to the Substitute Share Owner, a
certificate for the Substitute Common Shares it is then so prohibited from
repurchasing.
10. (a) Notwithstanding any other provision of this Agreement, this
Option may not be exercised for a number of shares as would, as of the date
of exercise, result in a Notional Total Profit (as defined below) of more
than $1.4 million less the amount of any Expense Fee actually paid to Camden
pursuant to Section 10.2(c) of the Merger Agreement; provided that nothing in
this sentence shall restrict any exercise of the Option permitted hereby on
any subsequent date.
(b) As used herein, the term Notional Total Profit with respect to
any number of shares as to which Grantee may propose to exercise this Option
shall be the Total Profit (as defined below) determined as of the date of such
proposed exercise assuming that this Option were exercised on such date for
such number of shares and assuming that such shares, together with all other
Option Shares held by Grantee and its affiliates as of such date, were sold
for cash at the closing market price for the KSB Common Stock as of the close
of business on the preceding trading day (less customary brokerage
commissions).
(c) As used herein, the term Total Profit shall mean the aggregate
amount (before taxes) of the following: (i) the amount received by Grantee
pursuant to Issuer's repurchase of the Option (or any portion thereof) pursuant
to Section 7, (ii) (x) the amount received by Grantee pursuant to Issuer's
repurchase of Option Shares (or any portion thereof) pursuant to Section 7,
less (y) the Grantee s purchase price for such Option Shares, (iii) the net
cash amounts received by Grantee pursuant to the sale of Option Shares (or
any other securities into which such Option Shares are converted or exchanged)
to any unaffiliated party, less (y) the Grantee's purchase price of such Option
Shares, (iv) any amounts received by Grantee on the transfer of the Option (or
any portion thereof) to any unaffiliated party, and (v) any amount equivalent
to the foregoing with respect to the Substitute Option.
11. The 90-day period for exercise of certain rights under Sections 2, 6,
7 and 14 shall be extended: (i) to the extent necessary to obtain all legal and
regulatory approvals for the exercise of such rights, for the expiration of all
statutory waiting periods; (ii) to the extent necessary to avoid liability
under Section 16(b) of the 1934 Act by reason of such exercise, and
(iii) during any period in which Grantee is precluded from exercising such
rights due to an injunction or other legal restriction, plus in each case
such additional period as is reasonably necessary for the exercise of such
rights promptly following the obtaining of such approvals or the expiration
of such periods.
12. Issuer hereby represents and warrants to Grantee as follows:
(a) Issuer has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of Issuer and no other corporate proceedings on the
part of Issuer are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly
executed and delivered by Issuer.
(b) Issuer has taken all necessary corporate and other action to
authorize and reserve and to permit it to issue, and at all times from the
date hereof through the termination of this Agreement in accordance with its
terms will have reserved for issuance upon the exercise of the Option, that
number of shares of KSB Common Stock equal to the maximum number of shares of
KSB Common Stock at any time and from time to time issuable hereunder, and all
such shares, upon issuance pursuant hereto, will be duly authorized, validly
issued, fully paid, nonassessable, and will be delivered free and clear of
all claims, liens, charges, encumbrance and security interests of any kind or
nature whatsoever and not subject to any preemptive rights.
(c) The execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby and compliance by Issuer with any of
the provisions hereof will not (i) conflict with or result in a breach of any
provision of its charter or bylaws or a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions
or provisions of any note, bond, debenture, mortgage, indenture, license,
material agreement or other material instrument or obligation to which Issuer
is a party, or by which it or any of its properties or assets may be bound, or
(ii) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Issuer or any of its properties or assets.
13. Grantee hereby represents and warrants to Issuer that:
(a) Grantee has all requisite corporate power and authority to enter
into this Agreement and, subject to any approvals or consents referred to
herein, to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of Grantee. This Agreement has been duly executed and
delivered by Grantee.
(b) The Option is not being, and any shares of KSB Common Stock or
other securities acquired by Grantee upon exercise of the Option will not be,
acquired with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the 1933 Act.
14. Neither of the parties hereto may assign any of its rights or
obligations under this Agreement or the Option created hereunder to any
other person, without the express written consent of the other party, except
that in the event a Subsequent Triggering Event shall have occurred prior to
an Exercise Termination Event, Grantee, subject to the express provisions
hereof, may assign in whole or in part its rights and obligations under this
Agreement or the Option created hereunder within 90 days following such
Subsequent Triggering Event (or such later period as provided in Section 11);
provided, however, that until the date 15 days following the date on which
the Federal Reserve Board approves an application by Grantee under the BHCA
to acquire the shares of KSB Common Stock subject to the Option, Grantee may
not assign its rights under the Option except in (i) a widely dispersed
public distribution, (ii) a private placement in which no one party acquires
the right to purchase in excess of 2% of the voting shares of Issuer,
(iii) an assignment to a single party (e.g., a broker or investment banker)
for the purpose of conducting a widely dispersed public distribution on
Grantee's behalf or (iv) any other manner approved by the Federal Reserve
Board.
15. Each of Grantee and Issuer will use its best efforts to make all
filings with, and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions contemplated
by this Agreement, including without limitation making application to list
the shares of KSB Common Stock issuable hereunder on the NASDAQ National
Market system upon official notice of issuance and applying to the Federal
Reserve Board under the BHCA for approval to acquire the shares issuable
hereunder, but Grantee shall not be obligated to apply to state banking
authorities for approval to acquire the shares of KSB Common Stock issuable
hereunder until such time, if ever, as it deems appropriate to do so.
16. The parties hereto acknowledge that damages would be an inadequate
remedy for a breach of this Agreement by either party hereto, that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof or was otherwise breached, and
that the parties will be entitled to equitable relief hereunder, including,
without limitation, an injunction or injunctions to prevent and enjoin breaches
of the provisions of this Agreement and to enforce specifically the terms and
provisions hereof, in addition to any other remedy at law or in equity to
which they may be entitled at law or in equity. Any requirements for the
securing or posting of any bond with respect to any such remedy are hereby
waived.
17. If any term, provision, covenant or restriction contained in this
Agreement is held by a court or other governmental authority of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the
terms, provisions and covenants and restrictions contained in this 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 governmental
authority determines that Holder is not permitted to acquire, or Issuer or
Substitute Option Issuer, as the case may be, is not permitted to repurchase
pursuant to Section 7 or Section 9, as the case may be, the full number of
shares of KSB Common Stock provided in Section 1(a) (as adjusted pursuant to
Section 1(b) or 5), it is the express intention of Issuer (which shall be
binding on the Substitute Option Issuer) to allow Holder to acquire or to
require Issuer or Substitute Option Issuer, as the case may be, to repurchase
such lesser number of shares as may be permissible, without any amendment or
modification hereof.
18. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person,
by cable, telegram, telecopy or telex, or by registered or certified mail
(postage prepaid, return receipt requested) at the respective addresses of
the parties set forth in the Merger Agreement.
19. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof.
20. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
21. Except as otherwise expressly provided herein, each of the parties
hereto shall bear and pay all costs and expenses incurred by it or on its
behalf in connection with the transactions contemplated hereunder, including
fees and expenses of its own financial consultants, investment bankers,
accountants and counsel.
22. Except as otherwise expressly provided herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties
with respect to the transactions contemplated hereunder and supersedes all
prior arrangements or understandings with respect thereof, written or oral.
The terms and conditions of this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement, expressed or implied, is
intended to confer upon any party, other than the parties hereto, and their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as expressly
provided herein.
23. Capitalized terms used in this Agreement and not defined herein shall
have the respective meanings assigned thereto in the Merger Agreement.
[Remainder of page left blank intentionally.]
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
CAMDEN NATIONAL CORPORATION
By: s/ Robert W. Daigle
Name: Robert W. Daigle
Title:
KSB BANCORP, INC.
By: s/ John C. Witherspoon
Name: John C. Witherspoon
Title: President and
Cheif Executive Officer
PRESS RELEASE
FOR IMMEDIATE RELEASE
Date: July 27, 1999
Contact: Robert W. Daigle, John C. Witherspoon
President & CEO President & CEO
Camden National Corporation KSB Bancorp, Inc.
2 Elm Street, Camden, ME 04843 Main Street, Kingfield, ME 04947
Phone - (207) 236-9131, Ext. 2160 Phone - (207) 265-2090, Ext. 1230
Fax - (207) 236-7889 Fax - (207) 265-5061
CAMDEN NATIONAL CORPORATION ANNOUNCES AGREEMENT TO ACQUIRE KSB
BANCORP, INC.
CAMDEN, MAINE -
Camden National Corporation ("CNC") (AMEX: CAC) and KSB Bancorp, Inc. ("KSB")
(NASDAQ: KSBK) jointly announced today the signing of a definitive agreement
(the "Agreement") pursuant to which CNC will acquire KSB, the holding company
for Kingfield Savings Bank, a Maine-chartered savings bank headquartered in
Kingfield, Maine, in a transaction valued at approximately $28,100,000. As
of June 30, 1999, Kingfield Savings Bank had total assets of $179.3 million,
total deposits of $130.9 million, total loans outstanding of $143.5 million,
and stockholders' equity of $14.0 million. Kingfield Savings Bank operates
9 branch offices located in Franklin, Androscoggin and Somerset Counties,
Maine. This transaction, which is subject to regulatory and shareholder
approvals, is expected to close during the first quarter of 2000.
The Agreement, which was approved unanimously by the boards of directors of CNC
and KSB, respectively, provides for a fixed exchange ratio whereby shareholders
of KSB will receive 1.136 shares of Camden National Corporation stock for each
share of KSB stock, subject to adjustment under certain circumstances. Based
on a closing price of $19.75 per share of Camden National Corporation on July
27, 1999, the cash equivalent value of the deal is $22.436 for each share of
KSB stock. The price equates to 2.0 times the non-diluted book value of KSB at
June 30, 1999 and 14.7 times KSB's non-diluted earnings per share of $1.53 for
the 12-month period ending June 30, 1999. It is anticipated that the
combination will be accounted for under the pooling of interest accounting
method.
Subsequent to the purchase of KSB, Camden National Corporation intends to
combine Kingfield Savings Bank with United Bank, a wholly owned subsidiary of
CNC headquartered in Bangor with total assets of $132.2 million as of June 30,
1999. The new financial institution, which is expected to have combined assets
of over $300 million, will have 18 branch locations serving parts of central,
eastern and western Maine. John C. Witherspoon, President and CEO of Kingfield
Savings Bank will become President and CEO of the new bank; and Bruce D.
Bartlett, President and CEO of United Bank, will become Executive Vice
President and Senior Loan Officer, responsible for the overall management of
the combined loan portfolio and credit administration.
Commenting on the transaction, Robert W. Daigle, President and CEO of CNC,
stated, "This is a unique opportunity to strengthen our company and improve
our ability to provide our full range of financial services to a broader
market area. Combining Kingfield Savings Bank and United Bank will create a
new community bank that we expect will have the scale to support the products
and technological advances that customers in these markets want today and
desire for tomorrow. The two entities currently are very similiar, they serve
contiguos markets of customers with comparable demographics and financial
needs, and each has earned the reputation of being committed to meeting the
banking needs of the customers and communities they serve. By pooling and
leveraging our resources, we will enhance our ability to deliver products
and services to our customers and provide an attractive return for our
shareholders."
John C. Witherspoon, President and CEO of KSB, commented, "We are extremely
pleased to be partnering with Camden National Corporation and United Bank.
All three organizations have a long history of excellence in both customer
and community service. This partnership will enhance the breadth of products
and services, such as Trust and Investment Services and Internet banking,
offered to our customers while providing greater liquidity and value to our
existing shareholders. Importantly, the merger will allow us to retain our
identity as an independent community bank, providing our unique brand of
services which has contributed enormously to the success of each of our
franchises."
Camden National Corporation is the holding company for three financial services
companies: Camden National Bank, a full-service community bank with 10 banking
offices in Belfast, Bucksport, Camden, Damariscotta, Rockland, Thomaston,
Union, Vinalhaven, and Waldoboro, and online @ www.camdennational.com;
United Bank, a full-service community bank with nine offices in Bangor,
Corinth, Dover-Foxcroft, Greenville, Hampden, Hermon, Jackman, Milo and
Winterport; and Trust Company of Maine, headquartered in Bangor offering
traditional trust and investment services throughout Central Eastern Maine.
KSB Bancorp, Inc. is the holding company for Kingfield Savings Bank, a
community-oriented financial institution that conducts its business through
nine full service retail banking offices located in Franklin, Somerset and
Androscoggin Counties, Maine.
This press release contains 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 CNC or KSB,
as the case may be. Actual events, performance and results could differ
materially from the anticipated events, performance or results expressed or
implied by such forward-looking statements. The factors which may cause such
differences include, among other things, 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.
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