FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported): SEPTEMBER 8, 1998
................
GREATER COMMUNITY BANCORP
.................................................................
(Exact name of registrant as specified in its charter)
NEW JERSEY 0-14294 22-2545165
.................................................................
(State or other (Commission (IRS Employer
jurisdiction of File No.) Identification No.)
incorporation)
55 UNION BOULEVARD, TOTOWA, NEW JERSEY 07512
.................................................................
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 973-942-1111
..............
.................................................................
(Former name or former address, if changed since last report)
1
<PAGE>
Item 5. Other Events.
On September 8, 1998, Greater Community Bancorp (the "Corporation")
announced the signing of a definitive merger agreement with First Savings
Bancorp of Little Falls, Inc. ("First Savings"). Under the terms of the
agreement: (1) First Savings will be merged into a subsidiary of the
Corporation, and (2) First Savings Bank of Little Falls, FSB, ("Little Falls"),
the sole bank subsidiary of First Savings, will be merged into Great Falls Bank,
one of the Corporation's bank subsidiaries. Little Falls has approximately $180
million in assets. Little Falls operates from three branches, two of which are
located in Little Falls, New Jersey. The third branch is located in Little
Ferry, New Jersey.
The Corporation will pay $23 million in the merger. This price is
approximately 222% of the book value of First Savings at June 30, 1998 and 25
times its annualized income based on earnings for the six months ended June 30,
1998. The price represents a deposit premium of approximately 7.4%.
Consummation of the merger is subject to approval by bank regulatory
authorities and the shareholders of First Savings. The merger is expected to be
completed in the first quarter of 1999.
Upon completion of the merger, the Corporation will have total assets
of $540 million and will operate 15 banking offices in Bergen and Passaic
Counties, New Jersey. The merger will be accounted for as a purchase. It is
anticipated to have an insignificant impact on earnings in 1999 and to be
accretive to earnings in 2000. On a cash earnings basis (excluding the effect of
amortization of goodwill), the merger is expected to be accretive to earnings in
1999 and 2000.
Item 7. Financial Statements and Exhibits.
(c) Exhibits. The following exhibit is being filed with this Report and
is attached hereto:
2.1 Agreement and Plan of Merger dated September 4,
1998 among Greater Community Bancorp, GCB
Acquisition Corp., and First Savings Bancorp of
Little Falls, Inc. (First Savings Disclosure
Schedule and GCB Disclosure Schedule Omitted)
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GREATER COMMUNITY BANCORP
..............................
(Registrant)
SEPTEMBER 9, 1998 /s/ George E. Irwin
Date ......................... ..............................
(Signature)
GEORGE E. IRWIN
PRESIDENT AND C.O.O.
3
<PAGE>
EXHIBIT INDEX
Exhibit No. Title
2.1 Agreement and Plan of Merger dated September 4,
1998 among Greater Community Bancorp, GCB
Acquisition Corp., and First Savings Bancorp of
Little Falls, Inc. (First Savings Disclosure
Schedule and GCB Disclosure Schedule Omitted)
<PAGE>
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement"), made this 4th day of
September, 1998, by and between GREATER COMMUNITY BANCORP, a corporation duly
organized and validly existing under the laws of the State of New Jersey
(hereinafter referred to as "GCB"), having an address for purposes of this
Agreement located at 55 Union Boulevard, Totowa, New Jersey 07512; GCB
ACQUISITION CORP., a corporation duly organized and validly existing under the
laws of the State of New Jersey (hereinafter referred to as "Newco"), and a
wholly owned subsidiary of GCB, having an address for purposes of this Agreement
located at 55 Union Boulevard, Totowa, New Jersey 07512; and FIRST SAVINGS
BANCORP OF LITTLE FALLS, INC., a corporation duly organized and validly existing
under the laws of the State of New Jersey (hereinafter referred to as "First
Savings"), having an address for purposes of this Agreement located at 115 Main
Street, Little Falls, New Jersey 07424. This Agreement contemplates a
transaction in which GCB will acquire all of the outstanding capital stock of
First Savings for cash by means of a reverse subsidiary merger of Newco with and
into First Savings.
W I T N E S S E T H :
WHEREAS, the Boards of Directors of GCB, Newco and First Savings,
deeming it advisable for the mutual benefit of GCB, First Savings and Newco and
their respective stockholders, that First Savings merge with Newco upon the
terms and conditions hereinafter set forth (hereinafter sometimes referred to as
the "Merger" and sometimes referred to as the "Holding Company Merger"), have
each by duly adopted resolutions approved this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1. The Corporations Proposing to Merge. The names of the
corporations proposing to merge are GCB ACQUISITION CORP.
("Newco") and FIRST SAVINGS BANCORP OF LITTLE FALLS, INC. ("First
Savings"). Newco and First Savings are both business
corporations organized and existing under the New Jersey Business
Corporation Act (the "Act").
1.2. Merger; Effect of Merger; Surviving Corporation.
(a) Upon performance in all material respects of all
covenants and obligations of the parties contained herein and
1
<PAGE>
upon fulfillment in all material respects or waiver of all conditions to the
obligations of the parties contained herein, at the effective date of the Merger
(the "Effective Date"), Newco shall be merged with and into First Savings, which
shall be the surviving corporation and which shall continue to exist as the
surviving corporation under its present name pursuant to the provisions of the
Act. First Savings is hereinafter sometimes referred to as the "Surviving
Corporation". The separate corporate existence of Newco shall cease upon the
Effective Date in accordance with the provisions of the Act.
(b) The Certificate of Incorporation of First Savings upon the
Effective Date shall be the Certificate of Incorporation of the Surviving
Corporation and said Certificate of Incorporation shall continue in full force
and effect until amended in the manner prescribed by the provisions of the Act.
(c) The Bylaws of Newco upon the Effective Date shall become the Bylaws
of the Surviving Corporation and said Bylaws shall continue in full force and
effect until changed, altered or amended in the manner prescribed by such Bylaws
and the provisions of the Act.
(d) The directors and officers of Newco upon the Effective Date shall
be the directors and officers of the Surviving Corporation and shall continue to
hold their respective offices until the election and qualification of their
respective successors or until their tenure is otherwise terminated in
accordance with the Bylaws of the Surviving Corporation.
1.3. Conversion of Newco Shares Into Shares of Surviving Corporation.
Each share of Common Stock of Newco outstanding on the Effective Date shall
remain outstanding immediately after the merger as an identical share of Common
Stock of the Surviving Corporation.
1.4. Conversion of First Savings Shares Into Right to Receive Cash.
Each share of Common Stock of First Savings outstanding immediately prior to the
Effective Date shall, upon the Effective Date by virtue of the Merger and
without any action on the part of any holder thereof, be converted into a right
to receive $52.26, subject to adjustment as provided in Section 1.5 and subject
to the provisions of Section 1.6. The amount of $52.26, as adjusted pursuant to
Section 1.5, is hereinafter referred to as the "Conversion Amount"; the amount
obtained by multiplying (a) the Conversion Amount by (b) the number of shares of
First Savings Common Stock outstanding on the Effective Date (which number of
shares shall be 440,100) is hereinafter referred to as the "Total Conversion
Amount." In no event shall the Total Conversion Amount exceed $23,000,000.00.
2
<PAGE>
Each share of Common Stock of First Savings which, immediately prior to
the Effective Date, was issued and held as treasury stock by First Savings will
be canceled and retired.
1.5. Adjustment to Conversion Amount. The Conversion Amount shall be
subject to the following adjustments: (a) If the stockholders' equity of First
Savings as of the end of the month preceding the closing contemplated by Article
VIII hereof (the "Closing"), adjusted as provided in the following paragraph of
this Section 1.5 (the "Adjusted Net Worth") shall be less than $10,050,785 (the
stockholders' equity of First Savings, less Unrealized Gain on Securities
Available for Sale, as of June 30, 1998), the Total Conversion Amount shall be
reduced by the amount of the shortfall and the Conversion Amount shall be
reduced by the reduction in the Total Conversion Amount divided by the number of
shares of First Savings Common Stock outstanding on the Effective Date (which
number of shares shall be 440,100); and (b) if total expenses ("Transaction
Expenses") incurred by First Savings and the FS Subsidiaries in connection with
the transactions contemplated by this Agreement exceed $557,500, then the Total
Conversion Amount shall be reduced by the amount by which such expenses exceed
$557,500 and the Conversion Amount shall be reduced by the reduction in the
Total Conversion Amount divided by the number of shares of First Savings Common
Stock outstanding on the Effective Date (which number of shares shall be
440,100). For purposes of this Agreement, "Transaction Expenses" shall include,
but shall not be limited to, the following, regardless of whether such expenses
shall have been paid or accrued as of the date of Closing: Investment banking
expenses, legal expenses, accounting expenses, costs of preparing and printing
the proxy, proxy solicitation costs, costs of the meeting of stockholders of
First Savings contemplated in Section 1.8 hereof and costs of SEC filings; but
shall not include amounts payable to Dr. Kostakopoulos pursuant to Section 5.7
or 5.12 hereof, amounts which may become payable to Brian McCourt under the
Change In Control Severance Agreement between Mr. McCourt and the Bank,
obligations to pay Retention Bonuses (as that term is defined in Section 5.9
hereof) and costs of converting the Bank incurred pursuant to Section 5.2
hereof.
For purposes hereof, "Adjusted Net Worth" as of a given date shall mean
the net worth of First Savings, excluding Unrealized Gain (or Loss) on
Securities Available for Sale, on such date as shown on a consolidated statement
of financial condition of First Savings and the FS Subsidiaries as of such date,
subject to the following adjustments: (w) up to $557,500 of Transaction Expenses
incurred (and recorded as expenses) prior to such date by First Savings in
connection with the transactions contemplated hereby shall be added to the
consolidated book net worth of First Savings; (x) all gains, on an after tax
basis, on sales of securities made subsequent to June 30, 1998 shall be
subtracted from the consolidated book net worth of First Savings; (y) the
3
<PAGE>
effect, on an after tax basis, of all changes made by First Savings at the
request of GCB pursuant to Section 5.10 hereof shall be excluded from the
consolidated book net worth of First Savings; and (z) all costs of converting
the Bank incurred pursuant to Section 5.2 hereof shall be added to the
consolidated book net worth of First Savings. The aforementioned consolidated
statement of financial condition of First Savings and the FS Subsidiaries shall
(i) be prepared in accordance with the books of First Savings and the FS
Subsidiaries, (ii) be prepared in accordance with generally accepted accounting
principles ("GAAP") consistently applied between June 30, 1998 and such date and
(iii) fairly presents the consolidated financial position of First Savings and
the FS Subsidiaries at such date.
1.6. Payment of Conversion Amount.
(a) GCB shall designate a bank or other institution with fiduciary
powers to act as Exchange Agent hereunder. Such designation shall be subject to
approval by First Savings, which approval shall not be unreasonably withheld or
delayed. The fees of the Exchange Agent shall be paid by GCB.
(b) GCB shall, not less than twenty-four hours prior to the Closing
Date, deposit with the Exchange Agent an amount equal to 100% of the Total
Conversion Amount. The Exchange Agent shall distribute such funds in accordance
with the following subsections of this Section 1.6.
(c) First Savings may submit to its shareholders instructions for
submitting their stock certificates to First Savings prior to Closing. All stock
certificates submitted to First Savings prior to Closing shall be delivered by
First Savings to GCB at the Closing. All stock certificates submitted to First
Savings prior to Closing shall be delivered by First Savings to GCB at Closing.
At Closing, First Savings and GCB shall jointly execute a letter of direction to
the Exchange Agent with respect to the First Savings shareholders who have
submitted their stock certificates prior to Closing and the amount to be paid to
each. The Exchange Agent shall, in accordance with the aforementioned letter of
direction, pay to the First Savings shareholders specified in such letter of
direction an amount equal to 100% of the Conversion Amount for their shares
within twenty-four (24) hours following the Effective Date by check or
electronic funds transfer.
(d) Within one (1) business day following the Closing, GCB shall send
instructions for submitting their stock certificates to the Exchange Agent to
any First Savings shareholders who did not submit their stock certificates
pursuant to subsection (a) above. The Exchange Agent shall pay, by check or
electronic funds transfer, to the First Savings shareholders who submit their
stock certificates pursuant to these instructions
4
<PAGE>
subsequent to Closing an amount equal to 100% of the Conversion Amount for their
shares within one (1) business day following receipt of the stock certificate.
(e) All payments to First Savings shareholders pursuant to clauses (c)
and (d) of this Section 1.6 shall be sent to the shareholder's address as shown
on the stock records of First Savings, or to such other address as a shareholder
may specify in a written instruction submitted with the shareholder's stock
certificates.
(f) Notwithstanding the tender or non-tender of the stock certificates,
effective as of the Effective Date all shares of First Savings shall be and
become void and shall cease to evidence any ownership interest in First Savings,
Newco or GCB and shall instead be converted into the right to receive a cash
payment equal to the Conversion Amount as detailed in Section 1.4 hereof, as
adjusted pursuant to Section 1.5 hereof. Notwithstanding anything herein to the
contrary, this Section 1.6(f) shall be construed as an agreement as to which the
shareholders of First Savings are intended to be third party beneficiaries and
shall be enforceable by such persons and their heirs and representatives.
(g) Notwithstanding anything to the contrary in this Section 1.6, if
any holder of First Savings stock shall be unable to surrender his or her
certificate for shares of First Savings Stock because such certificate has been
lost or destroyed, such holder may deliver in lieu thereof a lost stock
certificate affidavit and indemnity bond in form and substance and with surety
satisfactory to GCB.
1.7. Certificate of Merger; Effective Date. At the Closing, the proper
officers of First Savings and Newco, respectively, shall execute and file a
Certificate of Merger as prescribed by the Act. Such Certificate of Merger shall
provide that the Effective Date of the merger shall be 11:59 p.m. on the day the
Certificate of Merger is filed with the State of New Jersey. If practicable,
such Certificate of Merger will be filed on the date of Closing; if that is not
practicable, then the Certificate of Merger shall be filed on the first business
day following the date of Closing.
1.8. Meeting of Stockholders of First Savings. Promptly following
execution of this Agreement and Plan of Merger, the Board of Directors of First
Savings shall direct and cause this Agreement to be submitted to the
stockholders of First Savings, at a meeting of the stockholders of First
Savings, for the purpose of adopting and approving the same. Such meeting shall
take place not later than the 120th day following the date of this Agreement.
The Board of Directors of First Savings shall, subject to the exercise of their
fiduciary duties, recommend that
5
<PAGE>
the stockholders of First Savings vote to adopt and approve this Agreement and
Plan of Merger. First Savings shall comply with all applicable laws and
regulations, including the proxy rules promulgated by the Securities and
Exchange Commission, applicable to the calling and conduct of such meeting.
1.9. Voting Agreement by Shareholders. First Savings shall, upon
execution of this Agreement, deliver a certificate in the form of Exhibit D
hereto signed by each shareholder who also serves as a director of First Savings
as of the date of such certificate, indicating the intention of each such person
to vote in favor of the transaction at the stockholder meeting of First Savings
at which meeting a vote on the Agreement will be taken.
1.10. Approval by Sole Stockholder of Newco. Upon execution of this
Agreement, GCB, as sole stockholder of Newco, shall adopt a resolution adopting
and approving this Agreement and Plan of Merger.
1.11. Stock Transfer Books. At the Effective Date, the stock transfer
books of First Savings shall be closed and no transfer of First Savings Stock
shall thereafter be made.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF FIRST SAVINGS
First Savings hereby represents and warrants to GCB as follows:
2.1. Organization; Good Standing; Power; and Qualification. First
Savings is a corporation duly organized, validly existing and in good standing
under the laws of the State of New Jersey, has all requisite corporate power and
authority to own, lease and operate its properties, and to conduct its business
as it is now being conducted. Item 2.1(a) of the First Savings Disclosure
Schedule contains a list of all of First Saving's direct and indirect
subsidiaries (the "FS Subsidiaries"). Each FS Subsidiary other than First
Savings Bank of Little Falls, F.S.B. (the "Bank") is duly organized, validly
existing and in good standing under the laws of the State of New Jersey. The
Bank is a federal savings bank duly organized, validly existing and in good
standing under the laws of the United States of America. Each FS Subsidiary
(unless otherwise indicated, all references to the FS Subsidiaries include the
Bank) has all requisite corporate power and authority to own, lease and operate
its properties, and to conduct its business as it is now being conducted. First
Savings has heretofore delivered to GCB true and complete copies of the
Certificates of Incorporation and By-Laws, as amended to the date hereof, of
First Savings and each FS Subsidiary. Each of First Savings and the FS
Subsidiaries is duly qualified or licensed to do business and is in good
standing as a foreign
6
<PAGE>
corporation in each state or other jurisdiction in which the nature of its
business or operations requires such qualification or licensing. Item 2.1(b) of
the First Savings Disclosure Schedule contains a list of all foreign
jurisdictions in which First Savings and each FS Subsidiary is qualified or
licensed to do business.
2.2. Capitalization. The authorized capital stock of First Savings
consists of 5,000,000 shares of Common Stock, of which 440,100 shares are issued
and outstanding and 0 shares are held by First Savings as treasury stock.
2.3. Options, Etc.. First Savings has no outstanding convertible
securities, warrants, options, rights, calls or other commitments of any nature
to issue or sell its capital stock.
2.4. Authority; No Violation, etc. First Savings has all requisite
corporate power to execute, deliver and perform its obligations under this
Agreement. The execution and delivery of this Agreement and performance by First
Savings of its obligations hereunder have been duly approved and authorized by
all requisite corporate action of First Savings, subject to the stockholder
approval contemplated by Section 1.8 hereof. This Agreement has been duly
executed and delivered by First Savings and, subject as aforesaid, constitutes
the legal, valid and binding agreement of First Savings, subject to (i)
applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization, receivership and other laws relating to or affecting the rights
and remedies of creditors generally, and (ii) principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law). Except for matters disclosed in Item 2.4 of the First Savings Disclosure
Schedule, neither the execution and delivery of this Agreement by First Savings
nor compliance by First Savings with any of the provisions hereof will (a)
conflict with or result in a breach of any provision of First Savings's
Certificate of Incorporation, (b) violate, or result with the passage of time in
a violation of, or cause a default or acceleration under, or give rise to any
right to termination, cancellation or acceleration (whether immediately, or
after the giving of notice, or after the passage of time, or a combination
thereof) under, or result in the creation of any lien, charge or encumbrance on
any assets of First Savings or any FS Subsidiary pursuant to, any of the terms,
conditions or provisions of any agreement, instrument or obligation to which
First Savings or any FS Subsidiary is a party, or by which it or any of its
properties or assets may be bound, or (c) violate any Federal or state statute,
rule or regulation or judgment, order, writ, injunction or decree of any Federal
or state court, administrative agency or governmental body, in each case
applicable to First Savings or any FS Subsidiary, or any of their properties or
assets, or otherwise require any filing with, or obtaining any permit,
7
<PAGE>
authorization, consent or approval of, any Federal, State or local public body,
commission or authority, including without limitation the New Jersey Industrial
Site Responsibility Act (N.J.S.A. 13:1K-6 et. seq.), except those approvals and
authorizations specified in Section 2.5 hereof.
2.5. Governmental Approvals and Filings. No approval, authorization,
consent, license, clearance or order of, declaration or notification to, or
filing, registration or compliance with, any governmental or regulatory
authority is required in order to (a) authorize the Merger contemplated by this
Agreement, (b) authorize the merger of the Bank with and into Great Falls Bank
(the "Bank Merger") on the Effective Date or (c) prevent the termination of any
material right, privilege, license or agreement of First Savings or any FS
Subsidiary, or to prevent any material loss to First Savings or any FS
Subsidiary, or to the business of First Savings or any FS Subsidiary, by reason
of the Holding Company Merger or the Bank Merger, except (i) approvals by the
Office of Thrift Supervision, (ii) approvals of the Federal Reserve Board (or
the Federal Reserve Bank of New York under power delegated by the Federal
Reserve Board), (iii) in the case of the Bank Merger, compliance with N.J.S.A.
17:9A- 132 through 17:9A-148, inclusive, including approval by the Commissioner
of the Department of Banking and Insurance of New Jersey and filing of the
agreement and plan of the Bank Merger, certified as having been approved by the
stockholders of the Bank and Great Falls Bank, (iv) approvals by the Federal
Deposit Insurance Corporation for the acquisition and assumption of the deposits
of the Bank by Great Falls Bank and the insurance of the Bank's deposits
following the Effective Date, and (v) compliance with the proxy requirements of
the Securities Exchange Act of 1934 and the regulations promulgated thereunder.
2.6. Equity Investments. Except as set forth in Item 2.6 of the First
Savings Disclosure Schedule, First Savings does not own, directly or indirectly,
any voting shares of any company other than the FS Subsidiaries.
2.7. Financial Information. First Savings has delivered to GCB (a) its
audited consolidated statements of financial condition as of December 31, 1997
and 1996 and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for each of the years in the two-year period
ended December 31, 1997 and (b) its Quarterly Report on Form 10-QSB for the
quarterly period ended June 30, 1998. The aforementioned financial statements
and report do not contain any untrue statements of material fact or omit to
state any material fact necessary in order to make the statements and
information contained therein not misleading. Each of the financial statements
contained in the aforementioned financial statements and report, with the
related notes thereto, (i) is in accordance with the books of First Savings and
the FS Subsidiaries, (ii) has
8
<PAGE>
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except if and as otherwise
indicated therein and (iii) fairly present the consolidated financial position
of First Savings and the FS Subsidiaries at such dates and the results of its
operations and the cash flows for the respective periods indicated therein,
except, in the case of the unaudited statements, for normal year-end
adjustments. The copies of the consolidated corporate income tax returns of
First Savings and the FS Subsidiaries for the 12 month periods ended December
31, 1997 and December 31, 1996 which have been delivered to GCB are each true,
correct and complete.
2.8. Regulatory Filings. First Savings has delivered to GCB true and
complete copies of all reports filed by First Savings and the Bank with the
Office of Thrift Supervision and the Federal Deposit Insurance Corporation since
December 31, 1994.
2.9. Absence of Changes. Except for matters described in Item 2.9 of
the First Savings Disclosure Schedule, there has been no material adverse change
since June 30, 1998 in the assets, properties, business or condition, financial
or otherwise, of First Savings and the FS Subsidiaries, taken as a whole.
2.10. Agreements, etc. Item 2.10(a) of the First Savings Disclosure
Schedule contains a true and complete list of every agreement, to which First
Savings or an FS Subsidiary is a party or by which First Savings or an FS
Subsidiary is bound, which is performable in the future and which, together with
all other contracts of the same or similar nature, provides for the future
obligation to pay or receive more than $10,000.00 or is otherwise material to
the business of First Savings or any FS Subsidiary, including but not limited to
(a) leases of real or personal property, (b) any agreements for the sale of
assets other than in the ordinary course of business, (c) any agreements
pursuant to which First Savings or an FS Subsidiary has borrowed money or may in
the future borrow money and (d) software licenses; provided, however, that such
Item need not list outstanding loans to unaffiliated persons made by the Bank or
loan commitments and credit facilities pursuant to which the Bank may be
obligated to lend money to unaffiliated persons. Except for matters listed in
Item 2.10(b) of the First Savings Disclosure Schedule, First Savings and the FS
Subsidiaries have performed all obligations to be performed by them to date
under all contracts and other agreements listed in Item 2.10(a) of the First
Savings Disclosure Schedule and is not in default thereunder; and, to the best
knowledge of First Savings, there exists no default, or any event which upon the
giving of notice or the passage of time would give rise to any default, in the
performance of any obligation to be performed by any other party to any such
contract or other agreement.
9
<PAGE>
2.11. Absence of Undisclosed Liabilities. Neither First Savings nor any
FS Subsidiary has any material liabilities (whether matured or unmatured,
accrued, absolute or contingent or otherwise) which were not reflected, reserved
against, accrued for or otherwise disclosed on First Savings's consolidated
statement of financial condition dated as at June 30, 1998, except for
obligations to perform the contracts and the agreements listed on Item 2.10(a)
of the First Savings Disclosure Schedule in accordance with their respective
terms.
2.12. Condition of Tangible Assets. Those assets of First Savings and
the FS Subsidiaries that are tangible property necessary to their business
operations are in generally good operating condition and repair.
2.13. Litigation, etc. Except for matters listed on Item 2.13 of the
First Savings Disclosure Schedule: (a) there are no actions, suits, claims,
investigations or proceedings (legal, administrative or arbitrative) pending or,
to the best knowledge of First Savings, threatened, against First Savings or any
FS Subsidiary, whether at law or in equity, whether civil or criminal in nature
or whether before or by any Federal, state, municipal or other governmental
court, department, commission, board, bureau, agency or instrumentality,
domestic or foreign; and (b) there are no existing unsatisfied judgments,
decrees, injunctions or orders of any court, governmental department,
commission, agency, instrumentality or arbitrator outstanding against First
Savings or any FS Subsidiary. No petition for bankruptcy, voluntary or
involuntary, has been filed by or against First Savings or any FS Subsidiary,
neither First Savings nor any FS Subsidiary has made any assignment for the
benefit of its creditors and no receiver has been appointed for First Savings or
any FS Subsidiary or any of their assets.
2.14. Permits, Licenses, etc. Item 2.14 of the First Savings Disclosure
Schedule contains a list of all licenses, permits, orders and approvals issued
by any department, commission, agency or other instrumentality of any federal,
state, county or local government which pertains to the business conducted by
First Savings and each FS Subsidiary. First Savings Corporation is not licensed
as an insurance producer by the New Jersey Department of Banking and Insurance
and is not required to have such a license in order to conduct its business.
2.15. Compliance with Laws. Except as disclosed in Item 2.15 of the
First Savings Disclosure Schedule, neither First Savings nor any FS Subsidiary
is in violation, in any respect material to its business or assets, of any
federal, state, county or local law, ordinance, regulation or order applicable
to the business conducted by it. First Savings and each FS Subsidiary has all
licenses, permits, orders and approvals of any governmental or regulatory body
which are required for the
10
<PAGE>
conduct of the business conducted by it and which, if not held by it, could
reasonably be expected to have a material adverse effect upon its business or
assets (collectively, "Required Permits"). All such Required Permits are in full
force and effect, no violations are or have been reported in respect of any
Required Permit and no proceeding is pending, or to the best knowledge of First
Savings, threatened, to revoke or limit any such Required Permit.
2.16. Brokers' or Finders' Fees, etc. No agent, broker, investment
banker, person or firm acting on behalf of First Savings or under the authority
of First Savings is or will be entitled to any broker's or finder's fee or any
other commission or similar fee directly or indirectly from GCB, Newco, First
Savings or any FS Subsidiary in connection with any of the transactions
contemplated hereby, except for fees payable to Ryan, Beck & Co., which fees
shall be the sole responsibility of First Savings and shall be paid at or prior
to the Closing. It is expressly understood that Ryan, Beck & Co. has been
retained solely by and is working solely for the benefit of First Savings in
connection with this matter.
2.17. Employees. First Savings has heretofore delivered to GCB a true
and complete list of the names, positions and rates of compensation of all
employees of First Savings and each FS Subsidiary.
2.18. Names. During the last 3 years First Savings and the FS
Subsidiaries have used no business names other than their current corporate
names.
2.19. Year 2000 Readiness. First Savings and each of the FS
Subsidiaries have taken all reasonable steps necessary to address the computer
software, accounting and record keeping issues raised in order for the data
processing systems used in the business conducted by First Savings and the FS
Subsidiaries to be substantially Year 2000 compliant on or before the end of
1999 and, except as set forth in Item 2.19 of the First Savings Disclosure
Schedule, First Savings does not expect the future cost of addressing such
issues to be material. Neither First Savings nor any FS Subsidiary has received
a rating of less than satisfactory from any bank regulatory agency with respect
to Year 2000 compliance.
2.20. Benefit Plans; Employee Relations.
(a) Except as set forth in Item 2.20(a) of the First Savings Disclosure
Schedule, (i) First Savings and each FS Subsidiary is in substantial compliance
with all applicable Federal, state and local laws and regulations respecting
employment and employment practices, and terms and conditions of employment and
wages and hours, (ii) no collective bargaining
11
<PAGE>
agreement presently covers (nor has any, in the past, covered) any employees of
First Savings or any FS Subsidiary, nor is any currently being negotiated by
First Savings or any FS Subsidiary, nor is First Savings or any FS Subsidiary a
party to any other written contract with or material enforceable oral commitment
to any labor union, (iii) there is no unfair labor practice complaint against
First Savings or any FS Subsidiary pending before the National Labor Relations
Board or any comparable state or local agency, and (iv) there is no labor
strike, dispute, slowdown, stoppage or organizational effort actually pending
or, to the best knowledge of First Savings, threatened against or involving
First Savings or any FS Subsidiary.
(b) Item 2.20(b) of the First Savings Disclosure Schedule contains a
true and complete list of all written contracts with, or oral commitments for
the employment, retention or payment of any severance or other benefit to, any
employee, consultant or other person.
(c) Item 2.20(c) of the First Savings Disclosure Schedule contains a
true and complete list of all Employee Pension Benefit Plans (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA")),
all Employee Welfare Benefit Plans (as defined in Section 3(1) of ERISA), all
incentive compensation plans and all other employee benefit programs maintained
by First Savings or any FS Subsidiary in respect of its employees (other than
normal policies concerning vacations, holidays and salary continuation during
short absences for illness or other reasons) (all of the foregoing appearing on
such list being herein sometimes collectively referred to as "Employee Benefit
Programs"). First Savings has heretofore delivered to GCB true and complete
copies of all plan texts and other agreements adopted in connection with the
Employee Benefit Programs (including separation policies). With respect to such
plans, Item 2.20(c) of the First Savings Disclosure Schedule contains a true and
complete list of (and First Savings has heretofore delivered to GCB true and
complete copies of):
(i) the most recent Internal Revenue Service ("IRS")
determination letter received by First Savings or any FS Subsidiary relating to
each of the Employee Pension Benefit Plans listed in such Item 2.20(c) (the
"First Savings Retirement Plans") and all applications for determination letters
relating to First Savings Retirement Plans which are pending on the date hereof;
(ii) the most recent Annual Report (Form 5500 Series) and
accompanying schedules of each of the Employee Welfare Benefit Plans listed in
such Item (the "First Savings Welfare Plans") and each First Savings Retirement
Plan, as filed pursuant to applicable law;
12
<PAGE>
(iii) the Summary Plan Description (as currently in effect)
distributed to employees for all of First Savings Retirement Plans and First
Savings Welfare Plans; and
(iv) the most recent actuarial report received with respect to
each First Savings Retirement Plans that is a defined benefit plan, if any.
(d) Except as disclosed in Item 2.20(c) of the First Savings Disclosure
Schedule, (i) the First Savings Retirement Plans are in substantial compliance
with ERISA and will constitute qualified plans under the Internal Revenue Code
of 1986 immediately prior to the Effective Date, (ii) no material violation of
ERISA has occurred in connection with the administration of any First Savings
Retirement Plan or any First Savings Welfare Plan, (iii) there are no actions,
suits or claims pending or, to the best knowledge of First Savings, threatened
against any First Savings Retirement Plan or First Savings Welfare Plan, or any
administrator or fiduciary thereof, (iv) with respect to each First Savings
Retirement Plan and each First Savings Welfare Plan as to which an Annual Report
is required to be filed, no liabilities as of the date of the most recent Annual
Report relating to such Plan exist unless specifically referred to in such
Annual Report, and no materially adverse change has occurred with respect to the
financial materials covered by such Annual Report since the date thereof, (v) no
accumulated funding deficiency (within the meaning of Section 412 of the
Internal Revenue Code of 1986) exists with respect to any First Savings
Retirement Plan and (vi) no "reportable event" (as defined in Section 4043 of
ERISA) has occurred with respect to any First Savings Retirement Plan that is
subject to Title IV of ERISA. All First Savings Welfare Plans are either
self-funded, or are funded through a contract with an insurance company.
2.21. Tax Matters. First Savings and each FS Subsidiary has filed all
Federal, state and local income and other tax returns (including, but not
limited to, returns for state and federal income taxes, sales taxes, use taxes
and payroll taxes, and information reports), required to be filed by it, and
each such return is complete and accurate in all material respects and was filed
on a timely basis. First Savings and each FS Subsidiary has paid all taxes of
any nature whatsoever with any related penalties, interest and liabilities (any
of the foregoing being referred to herein as a "Tax") that are shown on such tax
returns as due and payable on or before the date hereof, other than such Taxes
as are being contested in good faith and which are listed in Item 2.21 of the
First Savings Disclosure Schedule. The accruals for current and deferred Taxes
reflected on the consolidated Statement of Financial Condition of First Savings
and the FS Subsidiaries as at June 30, 1998 are sufficient in all material
respects. Except as set forth in Item 2.21 of the First Savings Disclosure
Schedule, there are no claims or assessments
13
<PAGE>
pending against First Savings or any FS Subsidiary for any alleged deficiency in
Tax, and First Savings does not know of any threatened Tax claims or assessments
against it or any FS Subsidiary, which, in either case, involve amounts either
singly or in the aggregate in excess of $10,000.00. Neither First Savings nor
any FS Subsidiary has ever been subject to a sales and use tax examination.
Neither First Savings nor any FS Subsidiary has ever been subject to a payroll
tax examination. First Savings and the FS Subsidiaries do not treat any workers
as independent contractors. All information reports on Forms 1098 and 1099 were
filed on magnetic media. A true and complete copy of the policy and procedures
of First Savings and the FS Subsidiaries related to information reporting
compliance has been furnished to GCB. Neither First Savings nor any FS
Subsidiary has ever received any notices or penalties regarding failure to
comply with 1099 reporting requirements.
2.22. Insurance. Item 2.22 of First Savings Disclosure Schedule
contains a true and complete list of all policies of liability, theft, fidelity,
property damage and other forms of insurance held by First Savings or any FS
Subsidiary (specifying the insurer, amount of coverage, annual premium, type of
insurance, policy number and any pending material claims thereunder). The
policies listed in such Item 2.22 are outstanding and duly in force and all
premiums with respect to such policies are currently paid. Except as set forth
in such Item 2.22, neither First Savings nor any FS Subsidiary has, during the
past three fiscal years, been denied or had revoked or rescinded any policy of
insurance.
2.23. Dealings with Officers and Directors. Except as set forth in Item
2.23 of the First Savings Disclosure Schedule, there is no present transaction,
business relationship or indebtedness involving First Savings or any FS
Subsidiary which is of a type described in Item 404 of Regulation S-K
(promulgated by the Securities and Exchange Commission) or which is a "covered
transaction" as that term is defined in Section 23A of the Federal Reserve Act
(12 U.S. Code 371c), as amended, nor is First Savings or any FS Subsidiary a
party to any agreement or understanding which provides for or contemplates such
a transaction, business relationship or indebtedness in the future. Except for
the Employee Benefit Programs referred to in Section 2.20, neither First Savings
nor any FS Subsidiary is a party to any agreement involving payments to any
person or entity based on the profits or gross revenues of First Savings.
2.24. Securities Exchange Act of 1934. First Savings has filed all
reports required to be filed by it pursuant to the Securities Exchange Act of
1934, as amended, during the 36 months preceding the date of this Agreement, and
such reports do not contain any untrue statement of a material fact or omit to
state
14
<PAGE>
any material fact which is necessary to make the statements
contained therein not misleading.
2.25. Environmental, Health and Safety. Except as set forth
in Item 2.25 of the First Savings Disclosure Schedule:
(a) Each of First Savings, the FS Subsidiaries, the
Participation Facilities and the Loan Properties (each as hereinafter defined)
are, and have been, in compliance with all applicable federal, state and local
laws including common law, regulations and ordinances and with all applicable
decrees, orders and contractual obligations relating to pollution, the discharge
of, or exposure to materials in the environment or workplace ("Environmental
Laws"), except for violations which, either individually or in the aggregate,
have not had and cannot reasonably be expected to have a material adverse effect
on First Savings or any FS Subsidiary.
(b) There is no suit, claim, action or proceeding, pending or,
to the best of First Saving's knowledge threatened, before any court, regulatory
agency or other forum in which First Savings, any FS Subsidiary, any
Participation Facility or any Loan Property, has been or, with respect to
threatened proceedings, may be, named as a defendant (x) for alleged
noncompliance (including by any predecessor) with any Environmental Laws, or (y)
relating to the release, threatened release or exposure to any material whether
or not occurring at or on a site owned, leased or operated by First Savings or
any FS Subsidiary, any Participation Facility or any Loan Property.
(c) During the period of (x) First Savings' or any FS
Subsidiary's ownership or operation of any of their respective current or former
properties, (y) First Savings' or any FS Subsidiary's participation in the
management of any Participation Facility, or (z) First Savings' or any FS
Subsidiary's holding of a security interest in a Loan Property, there has been
no release of materials in, on, under or affecting any such property, except
where such release has not had and cannot reasonably be expected to result in,
either individually or in the aggregate, a material adverse effect on First
Savings or any FS Subsidiary. Prior to the period of (x) First Savings' or any
FS Subsidiary's ownership or operation of any of their respective current
properties, (y) First Savings' or any FS Subsidiary's participation in the
management of any Participation Facility, or (z) First Savings' or any FS
Subsidiary's holding of a security interest in a Loan Property, there was no
release or threatened release of materials in, on, under or affecting any such
property, Participation Facility or Loan Property, except where such a release
has not had and cannot be reasonably expected to have, either individually or in
the aggregate, a material adverse effect of First Savings or any FS Subsidiary.
15
<PAGE>
(d) The following definitions apply for purposes of this
Section 2.25: (x) "Loan Property" means any property in which First Savings or
any FS Subsidiary holds a security interest, and, where required by the context,
said term means the owner or operator of such property; and (y) "Participation
Facility" means any facility in which First Savings or any FS Subsidiary
participates in the management and, where required by the context, said term
means the owner or operator of such property.
2.26. Restricted Activities and Transactions. Except as set forth in
Item 2.26 of the First Savings Disclosure Schedule, during the period commencing
June 30, 1998, neither First Savings nor any FS Subsidiary has taken any action
described in Section 4.2 (excluding subsection 4.2(g)) of this Agreement.
2.27. First Savings Disclosure Schedule and Other Materials Furnished
by First Savings. The First Savings Disclosure Schedule delivered simultaneously
with this Agreement by First Savings to GCB and identified and initialed as such
by an officer of First Savings (the "First Savings Disclosure Schedule"),
together with any materials furnished to GCB by First Savings and referred to in
this Article II, are true and complete in all material respects and do not
contain any untrue statement of a material fact or omit to state any material
fact which is necessary to make the statements contained therein not misleading.
2.28. Title to Property. Except as set forth in Item 2.28 of the First
Savings Disclosure Schedule, First Savings and the FS Subsidiaries have good and
marketable title to all of their real and personal property, including but not
limited to the real property on which the main office and each branch office of
the Bank is located, free and clear of all Encumbrances and imperfections of
title, if any. As used in this Agreement, the term "Encumbrances" shall mean and
include security interests, mortgages, leases, liens, pledges, options, rights
of first refusal and other encumbrances, whether or not relating to the
extension of credit or the borrowing of money.
2.29. Liquidation Account. The Bank has maintained sufficient records
to make the necessary computations of the balance of the liquidation account and
the subaccounts thereunder.
2.30. Survival. The representations and warranties of
First Savings contained in this Article II shall not survive the
Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GCB
16
<PAGE>
GCB hereby represents and warrants to First Savings as follows:
3.1. Organization; Good Standing; Power; and Qualification. Each of GCB
and Newco is a corporation duly organized, validly existing and in good standing
under the laws of the State of New Jersey, has all requisite corporate power and
authority to own, lease and operate its properties, and to conduct its business
as it is now being conducted. Great Falls Bank is a banking corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey. All of the outstanding capital stock of Great Falls Bank is owned by
GCB.
3.2. Authority; No Violation, etc. Each of GCB and Newco has all
requisite corporate power to execute, deliver and perform its obligations under
this Agreement. The execution and delivery of this Agreement and performance by
each of GCB and Newco of its obligations hereunder have been duly approved and
authorized by all requisite corporate action of GCB and Newco, respectively,
subject in the case of Newco to the stockholder consent contemplated by Section
1.10 hereof. This Agreement has been duly executed and delivered by GCB and
Newco and, subject as aforesaid, constitutes the legal, valid and binding
agreement of each of GCB and Newco, subject to (i) applicable bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization, receivership and
other laws relating to or affecting the rights and remedies of creditors
generally, and (ii) principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). Neither the
execution and delivery of this Agreement by GCB and Newco nor compliance by GCB
and Newco with any of the provisions hereof will (a) conflict with or result in
a breach of any provision of the Certificate of Incorporation of GCB or Newco,
(b) violate, or result with the passage of time in a violation of, or cause a
default or acceleration under, or give rise to any right to termination,
cancellation or acceleration (whether immediately, or after the giving of
notice, or after the passage of time, or a combination thereof) under, or result
in the creation of any lien, charge or encumbrance on any assets of GCB or Newco
pursuant to, any of the terms, conditions or provisions of any agreement,
instrument or obligation to which GCB or Newco is a party, or by which it or any
of its properties or assets may be bound, or (c) violate any Federal or state
statute, rule or regulation or judgment, order, writ, injunction or decree of
any Federal or state court, administrative agency or governmental body, in each
case applicable to GCB or Newco, or any of their properties or assets, or
otherwise require any filing with, or obtaining any permit, authorization,
consent or approval of, any Federal, State or local public body, commission or
authority, including without limitation the New Jersey Industrial Site
Responsibility Act (N.J.S.A. 13:1K-6 et. seq.), except those approvals and
authorizations specified in Section 3.3 hereof.
17
<PAGE>
3.3. Governmental Approvals and Filings. No approval, authorization,
consent, license, clearance or order of, declaration or notification to, or
filing, registration or compliance with, any governmental or regulatory
authority is required in order to authorize (a) the Holding Company Merger and
(b) the Bank Merger, except (i) approvals by the Office of Thrift Supervision,
(ii) approvals of the Federal Reserve Board (or the Federal Reserve Bank of New
York under power delegated by the Federal Reserve Board), (iii) in the case of
the Bank Merger, compliance with N.J.S.A. 17:9A-132 through 17:9A-148,
inclusive, including approval by the Commissioner of the Department of Banking
and Insurance of New Jersey and filing of the agreement and plan of the Bank
Merger, certified as having been approved by the stockholders of the Bank and
Great Falls Bank, (iv) approvals by the Federal Deposit Insurance Corporation
for the acquisition and assumption of the deposits of the Bank by Great Falls
Bank and the insurance of the Bank's deposits following the Effective Date, and
(v) compliance with the proxy requirements of the Securities Exchange Act of
1934 and the regulations promulgated thereunder.
3.4. Brokers' or Finders' Fees, etc. No agent, broker, investment
banker, person or firm acting on behalf of GCB or Newco or under the authority
of GCB or Newco is or will be entitled to any broker's or finder's fee or any
other commission or similar fee directly or indirectly from First Savings in
connection with any of the transactions contemplated hereby, except for fees
payable to Advest, Inc., which fees shall be the sole responsibility of GCB. It
is expressly understood that Advest, Inc. has been retained solely by and is
working solely for the benefit of GCB and Newco in connection with this matter.
3.5. Financial Information. GCB has delivered to First Savings (a) its
audited consolidated statements of financial condition as of December 31, 1997
and 1996 and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for each of the years in the two-year period
ended December 31, 1997 and (b) its Quarterly Report on Form 10-QSB for the
quarterly period ended June 30, 1998. The aforementioned financial statements
and report do not contain any untrue statements of material fact or omit to
state any material fact necessary in order to make the statements and
information contained therein not misleading. Each of the financial statements
contained in the aforementioned financial statements and report, with the
related notes thereto, (i) is in accordance with the books of GCB and its
subsidiaries, (ii) has been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except if and as otherwise indicated therein and (iii) fairly present the
consolidated financial position of GCB and its subsidiaries at such dates and
the results of its operations and the cash flows for the respective periods
indicated therein,
18
<PAGE>
except, in the case of the unaudited statements, for normal year-
end adjustments.
3.6. Regulatory Filings. GCB and its bank subsidiaries have made all
required filings with the Federal Reserve Board, the New Jersey Department of
Banking and Insurance and the Federal Deposit Insurance Corporation since
December 31, 1994.
3.7. Absence of Changes. There has been no material adverse change
since June 30, 1998 in the assets, properties, business or condition, financial
or otherwise, of GCB and its subsidiaries, taken as a whole.
3.8. Litigation, etc. Except for matters listed on Item 3.8 of the GCB
Disclosure Schedule: (a) there are no actions, suits, claims, investigations or
proceedings (legal, administrative or arbitrative) pending or, to the best
knowledge of GCB, threatened, against GCB or any subsidiary of GCB, whether at
law or in equity, whether civil or criminal in nature or whether before or by
any Federal, state, municipal or other governmental court, department,
commission, board, bureau, agency or instrumentality, domestic or foreign; and
(b) there are no existing unsatisfied judgments, decrees, injunctions or orders
of any court, governmental department, commission, agency, instrumentality or
arbitrator outstanding against GCB or any subsidiary of GCB. No petition for
bankruptcy, voluntary or involuntary, has been filed by or against GCB or any
subsidiary of GCB, neither GCB nor any subsidiary of GCB has made any assignment
for the benefit of its creditors and no receiver has been appointed for GCB or
any subsidiary of GCB or any of their assets.
3.9. Great Falls Bank. Great Falls Bank is in good standing under the
laws of the State of New Jersey and its deposits are insured by the Federal
Deposit Insurance Corporation.
3.10. Compliance with Laws. Except as disclosed in Item 3.10 of the GCB
Disclosure Schedule, neither GCB nor any subsidiary of GCB is in violation, in
any respect material to its business or assets, of any federal, state, county or
local law, ordinance, regulation or order applicable to the business conducted
by it. GCB and each subsidiary of GCB has all licenses, permits, orders and
approvals of any governmental or regulatory body which are required for the
conduct of the business conducted by it and which, if not held by it, could
reasonably be expected to have a material adverse effect upon its business or
assets (collectively, "Required Permits"). All such Required Permits are in full
force and effect, no violations are or have been reported in respect of any
Required Permit and no proceeding is pending, or to the best knowledge of GCB,
threatened, to revoke or limit any such Required Permit.
19
<PAGE>
3.11. Securities Exchange Act of 1934. GCB has filed all reports
required to be filed by it pursuant to the Securities Exchange Act of 1934, as
amended, during the 36 months preceding the date of this Agreement, and such
reports do not contain any untrue statement of a material fact or omit to state
any material fact which is necessary to make the statements contained therein
not misleading.
3.12. Year 2000 Readiness. GCB and each of its bank subsidiaries have
taken all reasonable steps necessary to address the computer software,
accounting and record keeping issues raised in order for the data processing
systems used in the business conducted by them to be substantially Year 2000
compliant on or before the end of 1999 and, except as set forth in the GCB
Disclosure Schedule, GCB does not expect the future cost of addressing such
issues to be material. Neither GCB nor either of its bank subsidiaries has
received a rating of less than satisfactory from any bank regulatory agency with
respect to Year 2000 compliance.
3.13. Defined Benefit Plan. Neither GCB nor Great Falls
Bank maintains a defined benefit retirement plan.
3.14. Undisclosed Liabilities. To the best knowledge of GCB, neither
GCB nor Great Falls Bank has any material liabilities (whether matured or
unmatured, accrued, absolute or contingent or otherwise) which were not
reflected, reserved against, accrued for or otherwise disclosed on GCB's
consolidated statement of financial condition dated as at June 30, 1998 and
which can reasonably be expected to prevent or delay the Closing.
3.15. Survival. The representations and warranties of GCB
contained in this Article III shall not survive the Closing.
ARTICLE IV
COVENANTS
A. Covenants of First Savings:
4.1. Regular Course of Business. Except as otherwise consented to in
writing by GCB, prior to the Effective Date, First Savings will, and will cause
the FS Subsidiaries to, carry on their business diligently and in the ordinary
course only, and, without limiting the generality of the foregoing, First
Savings will use its best efforts to preserve its present business organization
(including that of the FS Subsidiaries) intact and preserve the present
relationships of First Savings and the FS Subsidiaries with persons having
business dealings with them. During such period, First Savings will, and will
cause the FS Subsidiaries to, maintain their books of account, records and files
in the ordinary course in accordance with existing practices and all applicable
regulatory requirements.
20
<PAGE>
4.2. Restricted Activities and Transactions. Except as otherwise
consented to in writing by GCB, from the date of this Agreement through the
Effective Date, First Savings will not, and First Savings will not permit any of
the FS Subsidiaries, to:
(a) amend its Charter or By-Laws;
(b) issue, sell or deliver, or agree to issue, sell or
deliver, any shares of any class of capital stock of First Savings or any FS
Subsidiary or any securities convertible into any such shares, or any options,
warrants, or other rights calling for the issuance, sale or delivery of any such
shares or convertible securities;
(c) except in the ordinary course of business (and consistent
with past practice) (i) borrow, or agree to borrow, any funds or voluntarily
incur, assume or become subject to, whether directly or by way of guarantee or
otherwise, any obligation or liability (absolute or contingent), (ii) cancel or
agree to cancel any debts or claims, (iii) distribute, lease, sell or transfer,
agree to lease, sell or transfer, or grant or agree to grant any preferential
rights to lease or acquire, any of its assets, property or rights, (iv) make or
permit any amendment to or termination of any material contract or agreement,
license or other right to which it is a party or (v) mortgage or pledge any of
its assets, tangible or intangible; for purposes of this Agreement, any contract
or agreement which satisfies the criteria in Section 2.10 shall be deemed a
material contract or agreement.
(d) grant any bonus or increase in compensation, other than
increases given in conformity with past practice; provided, that in no event
shall (i) any increase be given to Haralambos S. Kostakopoulos or any other
employee who has received an increase after October 15, 1997 or (ii) any other
employee be given an increase in excess of 4% of his or her base pay. The
employees who have been given retention bonus agreements are listed in Item
4.2(d) to the First Savings Disclosure Schedule.
(e) enter into or make any change in any Employee Benefit
Program, except as required by law;
(f) acquire voting securities or any other ownership interest
in any corporation, association, joint venture, mutual savings association,
partnership, business trust or other business entity, or acquire control or
ownership of all or a substantial portion of the assets of any of the foregoing,
or merge, consolidate or otherwise combine with any other entity, or acquire any
branch of any entity engaged in the business of banking, or directly or
indirectly solicit or authorize the solicitation of or enter into any agreement
providing for any of the foregoing;
21
<PAGE>
(g) directly or indirectly solicit or authorize the
solicitation of or enter into any agreement or understanding or, except to the
extent as may be required by law or in order to satisfy the fiduciary duties of
the directors of First Savings, engage in any discussions with, or furnish any
non-public information concerning First Savings or any FS Subsidiary to, any
person or entity other than GCB or a representative thereof with respect to any
offer or possible offer from a third party (i) to purchase shares of any class
of capital stock of First Savings or any FS Subsidiary or any securities
convertible into any such shares, or to acquire any option, warrant or other
right to purchase or otherwise acquire any such shares or convertible
securities, (ii) to make a tender or exchange offer for any shares of any class
of capital stock of First Savings or any FS Subsidiary, (iii) to purchase, lease
or otherwise acquire all or a substantial portion of the assets of First Savings
or any FS Subsidiary, or (iv) to merge, consolidate or otherwise combine with
First Savings or any FS Subsidiary;
(h) except as disclosed in item 4.2(h) of the First Savings
Disclosure Schedule, make any capital expenditure in excess of $10,000;
(i) make, extend or roll over any loan or loan commitment
which, together with all other outstanding loans and loan commitments to the
same borrower and affiliates of such borrower, exceeds (x) $300,000, in the case
of loans secured by first mortgages on one to four family residential dwellings
or (y) $150,000 (exclusive of guarantees by agencies of the United States or the
State of New Jersey) for loans which are not secured by first mortgages on one
to four family residential dwellings;
(j) purchase any securities (whether for sale or to be held to
maturity) having a maturity in excess of five years from the date hereof; or
purchase more than $2,000,000 of any issue of securities issued by the United
States Treasury or any other agency of the United States Government ("Government
Securities"); or purchase any securities which are not Government Securities if
the cost of such securities, together with the cost of all other securities then
owned by First Savings or any FS Subsidiary, and issued by the same issuer or
any affiliate thereof, exceeds $2,000,000;
(k) offer to pay interest on accounts at the Bank at rates
which exceed the historical relationship of the Bank's rates for such accounts
to the prevailing rates for such accounts in the Bank's primary market area;
said historical relationships are disclosed in Item 4.2(k) of the First Savings
Disclosure Schedule;
22
<PAGE>
(l) enter into or agree to enter into any other agreement or
transaction not in the ordinary course of business; or
(m) Willfully take action which would or is likely to (i)
adversely affect the ability of either GCB or First Savings to obtain any
necessary approvals of governmental authorities required for the transactions
contemplated hereby; (ii) adversely affect First Saving's ability to perform its
covenants and agreements under this Agreement; or (iii) result in any of the
conditions to the Merger not being satisfied; or (iv) agree in writing or
otherwise to do any of the foregoing.
4.3. Dividends and Distributions; Repurchases. Except as otherwise
consented to in writing by GCB, prior to the Effective Date, First Savings will
not declare or pay any dividend on its capital stock in cash, stock or property,
and will not redeem, repurchase or otherwise acquire any shares of its capital
stock, except that First Savings may (a) declare and pay a fifty cent per share
dividend in September, 1998; (b) may declare and pay a dividend, effective May
1, 1999, in the event that the Closing does not occur on or before April 30,
1999, which dividend shall not exceed fifty cents per share; provided, that such
a dividend may not be declared in the event that the Closing shall not have
occurred by April 30, 1999 because of a breach by First Savings of any
representation, warranty, covenant or agreement made by it herein; or (c) may
declare and pay a dividend pursuant to Section 5.12.
4.4. Advice of Changes. First Savings will promptly advise GCB in
writing of (i) any event occurring subsequent to the date of this Agreement
which would render any representation or warranty of First Savings contained in
this Agreement, if made on or as of the date of such event or on or as of the
Closing, untrue or inaccurate in any material respect and (ii) any material
adverse change in the business of First Savings or any FS Subsidiary.
4.5. Acquisition Proposals. First Savings will use its best efforts to
provide GCB with same-day notice of any offer First Savings receives from or on
behalf of any third party of the type referred to in Section 4.2(g) hereof,
including in such notice the identity of the offeror and the complete terms of
any such offer, and will use its best efforts to provide GCB with same-day
notice of the receipt of any information that such an offer is likely to be made
and any available details with respect to such potential offer. First Savings
shall in any event provide GCB with the notices contemplated above no later than
the second business day following receipt of any such offer or receipt of
information that any such offer is likely to be made.
23
<PAGE>
4.6. Filings, Notices and Financial Statements. During the period
commencing on the date hereof and ending on the date on which the Closing
occurs:
(a) First Savings shall provide GCB with copies of all filings
made by First Savings, the Bank or any other FS Subsidiary on or after the date
hereof to the Office of Thrift Supervision, the Federal Deposit Insurance
Corporation and any other regulatory agency which has authority to regulate
First Savings, the Bank or any other FS Subsidiary by the first to occur of (i)
two business days following such filing or (ii) the Closing.
(b) To the extent that it is legally permitted to do so, First
Savings shall provide GCB with copies of all communications received by First
Savings, the Bank or any other FS Subsidiary from the Office of Thrift
Supervision, the Federal Deposit Insurance Corporation and any other regulatory
agency which has authority to regulate First Savings, the Bank or any other FS
Subsidiary within five business days of receipt of such communication or, if
sooner, by the Closing. If First Savings, the Bank or any other FS Subsidiary
shall receive any such communication which it is legally prohibited from
providing to GCB, First Savings shall notify GCB that such a communication has
been received within five business days of receipt thereof or, if sooner, by the
Closing, and First Savings and the FS Subsidiaries shall cooperate with GCB to
obtain the consent of the regulatory agency which issued such communication to
provide a copy thereof to GCB and, upon receipt of such consent, shall promptly
provide a copy of such communication to GCB.
(c) First Savings shall prepare unaudited financial statements
on a monthly basis and shall furnish copies of such statements to GCB by the
20th day following the end of each month; it is understood that the financial
statements to be furnished pursuant to this subparagraph shall be the financial
statements regularly prepared by the management of First Savings for its board
of directors.
(d) First Savings shall deliver to GCB its quarterly reports
on Form 10-QSB, all other SEC filings made by First Savings and all press
releases issued by First Savings or any FS Subsidiary on the date such filing is
made or such press release is issued.
4.7. Proxy Statement.
(a) The proxy statement for the meeting of First Savings
shareholders contemplated by Section 1.8 hereof will not, at the time of its
issuance and at the time of the meeting, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made,
24
<PAGE>
in the light of the circumstances under which they are made, not
misleading.
(b) First Savings shall cause a notice of meeting and proxy
statement regarding the meeting of First Savings shareholders contemplated by
Section 1.8 hereof to be mailed to its shareholders as soon as practicable in
accordance with applicable Federal and state law. Provided, however, that First
Savings shall furnish the proposed notice of meeting and proxy statement to GCB
for review and comments prior to sending them to its shareholders. First Savings
shall make the final determination as to the contents of such notice of meeting
and proxy statement.
4.8. Breaches and Adverse Developments. First Savings shall, in the
event it becomes aware of the impending or threatened occurrence of any event or
condition which would cause or constitute a breach (or would have caused or
constituted a breach had such event occurred or have been known prior to the
date hereof) of any of its representations, warranties, covenants or agreements
contained or referred to herein, or any other material adverse development
affecting First Savings or any of the FS Subsidiaries, give prompt written
notice thereof to GCB and use its best efforts to prevent or promptly remedy any
such breach.
4.9 Liquidation Account Computations. First Savings shall (a) furnish
to GCB a computation of the Liquidation Account within forty-five (45) days
following the date hereof and (b) recompute the Liquidation Account as of
January 1, 1999 and shall furnish such recomputation to GCB by January 31, 1999.
B. Covenants of GCB:
4.10. Funding and Capital Adequacy. After giving pro forma effect to
the Merger and any other acquisitions which GCB or its subsidiaries have agreed
to consummate, GCB will be deemed "well capitalized" under prompt corrective
action regulatory capital requirements from December 31, 1998 until receipt of
all approvals and authorizations required in connection with the transactions
contemplated by this Agreement from the following banking regulatory agencies:
The Office of Thrift Supervision, the Federal Reserve Board (or the Federal
Reserve Bank of New York under power delegated by the Federal Reserve Board),
the Commissioner of the Department of Banking and Insurance of New Jersey and
the Federal Deposit Insurance Corporation.
4.11. Filings, Notices and Financial Statements. During the period
commencing on the date hereof and ending on the date on which the Closing
occurs:
25
<PAGE>
(a) GCB shall provide First Savings with copies of all filings
made by GCB or either of its bank subsidiaries on or after the date hereof to
the Federal Reserve Board, the New Jersey Department of Banking and Insurance or
the Federal Deposit Insurance Corporation and any other regulatory agency which
has authority to regulate GCB or its bank subsidiaries by the first to occur of
(i) two business days following such filing or (ii) the Closing.
(b) GCB shall deliver to First Savings its quarterly reports
on Form 10-QSB or 10-Q, all other SEC filings made by GCB and all press releases
issued by GCB or any subsidiary of GCB on the date such filing is made or such
press release is issued.
4.12. Negative Covenants. Except as specifically contemplated by this
Agreement, GCB shall not do, or agree to commit to do, or permit any of GCB's
subsidiaries to do, without the prior written consent of First Savings (which
shall not be unreasonably withheld), any of the following:
(a) Willfully take action which would or is likely to (i)
adversely affect the ability of either GCB or First Savings to obtain any
necessary approvals of governmental authorities required for the transactions
contemplated hereby; (ii) adversely affect GCB's ability to perform its
covenants and agreements under this Agreement; or (iii) result in any of the
conditions to the Merger not being satisfied; or
(b) agree in writing or otherwise to do any of the
foregoing.
4.13. Breaches and Adverse Developments. GCB shall, in the event it
becomes aware of the impending or threatened occurrence of any event or
condition which would cause or constitute a breach (or would have caused or
constituted a breach had such event occurred or have been known prior to the
date hereof) of any of its representations, warranties, covenants or agreements
contained or referred to herein, or any other material adverse development
affecting GCB, Newco or Great Falls Bank, give prompt written notice thereof to
First Savings and use its best efforts to prevent or promptly remedy any such
breach.
4.14. Liquidation Account. GCB agrees to maintain or otherwise cause
Great Falls Bank to maintain the liquidation account established by the Bank
pursuant to the plan of conversion adopted in connection with its conversion
from mutual to stock form upon the Effective Date for the benefit of those
persons and entities who were eligible savings account holders of the Bank on
October 31, 1991 and who continue from time to time to have rights therein.
26
<PAGE>
4.15. GCB Shareholder Approval. Approval of the transactions
contemplated by this Agreement by the shareholders of GCB is not required and
will not be sought.
ARTICLE V
MUTUAL COVENANTS AND AGREEMENTS
5.1. Governmental Approvals.
(a) First Savings will, and will cause the FS Subsidiaries to, use
their best efforts to comply as promptly as practicable with the governmental
requirements specified in Sections 2.5 and 3.3 and obtain as soon as practicable
all necessary approvals, authorizations, consents, licenses, clearances or
orders referred to in those sections; provided, however, that the following
shall be the responsibility of GCB and its subsidiaries: (i) obtaining approval
(or waiver) of the Federal Reserve Board (or the Federal Reserve Bank of New
York under power delegated by the Federal Reserve Board), (ii) obtaining
approval by the Federal Deposit Insurance Corporation for the acquisition and
assumption of the deposits of the Bank by Great Falls Bank and the insurance of
the Bank's deposits following the Effective Date and (iii) obtaining approval of
the Commissioner of the Department of Banking and Insurance Of New Jersey to the
Bank Merger. First Savings shall, within thirty (30) days following the date
hereof, apply for non- applicability determinations from the New Jersey
Department of Environmental Protection with respect to the New Jersey Industrial
Site Responsibility Act for all real property owned by First Savings or any FS
Subsidiary.
(b) GCB will, and will cause Newco and Great Falls Bank to, use their
best efforts to comply as promptly as practicable with the governmental
requirements specified in Sections 2.5 and 3.3 and obtain as soon as practicable
all necessary approvals, authorizations, consents, licenses, clearances or
orders referred to in those sections; provided, however, that the following
shall be the responsibility of First Savings and the FS Subsidiaries: (i)
obtaining approvals by the Office of Thrift Supervision and (ii) compliance with
the proxy requirements of the Securities Exchange Act of 1934 and the
regulations promulgated thereunder.
(c) Each of First Savings and GCB agrees that it shall, and shall cause
its subsidiaries to, cooperate fully with the other in order to assist the other
to comply with those governmental responsibilities, and to obtain all approvals,
authorizations, consents, licenses, clearances or orders, which are the
responsibility of the other pursuant to clauses (a) and (b), above; in
furtherance of, and without limiting the generality of, the foregoing, each of
First Savings and GCB agrees that it shall, and shall cause its subsidiaries to,
provide promptly to the other such information concerning its business and
financial statements and affairs as, in the reasonable judgment of the
27
<PAGE>
other party or its counsel, may be required or appropriate for inclusion in any
application or other submission to a regulatory authority and to cause its
counsel and auditors to cooperate with the other's counsel and auditors in the
preparation of any such application or submission.
(d) GCB shall, if required by any regulatory authority as a condition
of granting any necessary approval, authorization, consent, license, clearance
or order, cause this Agreement to be submitted to the stockholders of GCB at a
special meeting of such stockholders for the purpose of adopting and approving
the same.
(e) Each party shall furnish to the other all applications for
regulatory approvals which it or any of its subsidiaries is required to make
pursuant to clauses (a) or (b) above for review and comments prior to sending
them to the regulators.
5.2. The Bank Merger. Promptly following execution of this Agreement,
GCB shall cause the Board of Directors of Great Falls Bank, and First Savings
shall cause the Board of Directors of Bank, to authorize the execution of a
merger agreement in the form attached hereto as Exhibit A (the "Bank Merger
Agreement") and to cause Great Falls Bank and Bank to execute the Bank Merger
Agreement and to submit the Bank Merger Agreement for approval by the
Commissioner of the Department of Banking and Insurance of New Jersey.
Thereafter, the parties shall each use their best efforts to obtain the approval
of the Commissioner.
It is the understanding of GCB that the Bank Merger may be accomplished
in the manner contemplated by this Section 5.2 hereof by reason of New Jersey
laws which give New Jersey banks "parity" with national banking associations.
However, in the event that it is necessary for Bank to convert to a national
banking association (or, if mergers between New Jersey commercial banks and New
Jersey savings banks are permissible, a New Jersey savings bank) in order to
complete the transaction, First Savings shall use its best efforts to bring
about such conversion as quickly as possible.
5.3. Expenses. In the event the Merger is not consummated, GCB and
First Savings will each separately bear its own expenses (and those of its
subsidiaries) incurred in connection with this Agreement or any transaction
contemplated hereby, subject to the provisions of Article IX hereof.
5.4. Public Announcements. Recognizing that they each have independent
obligations with respect to the dissemination of material information to the
public and to their respective shareholders, GCB and First Savings will to the
maximum extent feasible advise and confer with each other prior to the issuance
of any reports, statements or releases (including reports, statements or
releases to their respective employees) pertaining
28
<PAGE>
to this Agreement. Without limiting the generality of the foregoing, First
Savings shall furnish any such proposed report, statement or release to GCB for
review and comments prior to issuance.
5.5. Further Assurances. GCB and First Savings agree to execute and
deliver, and to cause their respective subsidiaries to execute and deliver, such
instruments and take such other actions as may be necessary or required in order
to consummate the transactions contemplated hereby.
5.6. Conversion Amount. First Savings shall, as soon as practicable
following the end of the month preceding the month in which the Closing is to
take place, furnish to GCB (i) a consolidated statement of the financial
condition of First Savings and the FS Subsidiaries at the end of said month,
prepared in accordance with Section 1.5 and (ii) a statement of its Adjusted Net
Worth at the end of said month, calculated in accordance with Section 1.5, which
statement shall include a reasonably detailed explanation of all adjustments.
5.7. Termination of Employment of Dr. Haralambos S. Kostakopoulos. The
employment of Dr. Haralambos S. Kostakopoulos, the President of First Savings,
will terminate upon the Effective Date. First Savings shall be responsible for
satisfying the obligation of First Savings to Dr. Kostakopoulos to make the
payment(s) provided for in Dr. Kostakopoulos' Employment Agreement, as detailed
in Item 5.7 of the First Savings Disclosure Schedule, subject to the following
provisions of this Section 5.7. This obligation shall not exceed $712,136 if Dr.
Kostakopoulos is alive on the Effective Date, which amount shall be paid to Dr.
Kostakopoulos by First Savings on the Effective Date; and this obligation shall
not exceed $0 if Dr. Kostakopoulos is not alive on the Effective Date. Except as
provided in this Section 5.7, Dr. Kostakopoulos agrees that he shall not be
entitled to any severance pay or other compensation from First Savings, any FS
Subsidiary, GCB, Newco, Great Falls Bank or any other subsidiary of GCB arising
out of, in connection with, or as a result of, his Employment Agreement, his
employment by First Savings and/or any FS Subsidiary, or the termination of his
employment.
If and to the extent that any payment made to Dr. Kostakopoulos
pursuant to the preceding paragraph of this Section 5.7 constitutes an "excess
parachute payment" which cannot be taken as a deduction pursuant to Section 280G
of the Internal Revenue Code of 1986, as amended, then the amount payable to Dr.
Kostakopoulos shall be reduced by the portion of such payment which constitutes
an excess parachute payment.
Notwithstanding anything herein to the contrary, Dr.
Kostakopoulos does not waive his rights to purchase continuation
29
<PAGE>
of benefits under the Consolidated Omnibus Budget Reconciliation Act or similar
New Jersey law.
5.8. Access to Records and Properties; Confidentiality.
(a) First Savings shall permit reasonable access to GCB and
its agents and representatives, including, without limitation, officers,
directors, employees, attorneys, accountants and financial advisors
(collectively, "Representatives"), and shall disclose and make available to GCB
and its Representatives, its books, papers and records relating to their
respective assets, stock ownership, properties, operations, obligations and
liabilities, including, but not limited to, books of account (including the
general ledger), tax records, minute books of director's and stockholder's
meetings, organizational documents, bylaws, material contracts and agreements,
filings with any regulatory authority, independent auditors work papers (subject
to receipt by such auditors of a standard access representation letter),
litigation files, plans affecting employees, and any other business activities
or prospects of First Savings or any FS Subsidiary, in which GCB and its
Representatives may have a reasonable interest. First Savings shall not be
required to provide access to or disclose information where such access or
disclosure would violate or prejudice the rights of any customer or would
contravene any law, rule, regulation, order or judgment, or in the case of the
document which is subject to an attorney-client privilege, would compromise the
right of the disclosing party to claim that privilege. The parties will use all
reasonable efforts to obtain waivers of any such restriction (other than the
attorney client privilege) and in any event make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply.
(b) GCB shall deliver to First Savings, within five (5)
business days following receipt thereof, copies of the public sections of all
regulatory examination reports rendered during the period commencing on the date
hereof and ending upon the Closing with respect to GCB or Great Falls Bank.
(c) All information furnished by the parties hereto previously
in connection with transactions contemplated by this Agreement or pursuant
hereto shall be used solely for the purpose of evaluating the transactions
contemplated hereby, shall be kept confidential and shall be treated as the sole
property of the party delivering the information until consummation of the
Merger contemplated hereby and, if such Merger shall not occur, each party and
each party's Representatives shall return to the other party all documents or
other materials containing, reflecting or referring to such information, will
not retain any copies of such information, shall keep confidential all such
information, and shall not directly or indirectly use such information for any
30
<PAGE>
competitive or commercial purposes or any other purpose not expressing permitted
hereby. Each party hereto shall inform its Representatives of the terms of this
Section 5.8. Any breach of this Section 5.8 by a Representative of a party
hereto shall conclusively be deemed to be a breach thereof by such party. In the
event that the Merger contemplated hereby does not occur or this Agreement is
terminated, all documents, notes and other writings prepared by a party hereto
or its Representatives based on information furnished by the other party, and
all other documents and records obtained from another party hereto in connection
herewith, shall be promptly destroyed. The obligation to keep such information
confidential shall continue for 30 months from the date the proposed Merger is
abandoned but shall not apply to (i) any information which (A) the party
receiving the information can establish by convincing evidence was already in
its possession prior to the disclosure thereof to it by the other party; (B) was
then generally known to the public other than as a result of a disclosure by any
party hereto or its Representatives; (C) became known to the public through no
fault of the party receiving such information; or (D) was disclosed to the party
receiving such information by a third party not bound by an obligation of
confidentiality; or (ii) disclosures pursuant to a legal, regulatory or
examination requirement or in accordance with an order of a court of competent
jurisdiction, provided that in the event of any disclosure required by this
clause (ii), the disclosing party will give reasonable prior written notice of
such disclosure to the other parties and shall not disclose any such information
without an opinion of counsel supporting its position that such information must
be disclosed.
(d) In addition to all other remedies that may be available to any
party hereto in connection with a breach by any other party hereto of its or its
Representative's obligations under this Section 5.8, each party hereto shall be
entitled to specific performance and injunctive and other equitable relief with
respect to this Section 5.8. Each party hereto waives, and agrees to use all
reasonable efforts to cause its Representatives to waive, any requirement to
secure or post a bond in connection with any such relief.
5.9. Employees of the Bank.
Subject to the provisions of this Section 5.9, GCB agrees that it shall
cause Great Falls Bank to allow the employees of the Bank who are offered and
who accept employment by Great Falls Bank (the "Bank Employees") to participate
in any of Great Falls Bank's employee benefit plans in which similarly situated
employees of Great Falls Bank participate, to the same extent as comparable
employees of Great Falls Bank. As of the Effective Date, GCB shall cause Great
Falls Bank to permit the Bank Employees to participate in Great Falls Bank's
group hospitalization, medical, life and disability insurance plans on
31
<PAGE>
the same terms and conditions as applicable to comparable employees of GCB and
its subsidiaries; provided, however, that all Bank Employees and their
dependents will be eligible to participate in the medical insurance plan(s)
covering employees of Great Falls Bank as of the Effective Date without regard
to pre-existing conditions or exclusions and with no uninsured waiting periods.
As of the next entry date immediately following the Effective Date, GCB shall
cause Great Falls Bank to permit the Bank Employees to participate in Great
Falls Bank's defined contribution plan; provided, that the Bank Employees shall
not be entitled to participate in the profit sharing portion of said plan until
the first anniversary of the Effective Date. The Bank Employees shall be given
credit for their years of service with the Bank or First Savings for eligibility
and vesting purposes under Great Falls Bank's defined contribution retirement
plan, except that the Bank Employees shall not be entitled to participate in the
profit sharing portion of said plan until the first anniversary of the Effective
Date.
As of the Effective Date, the Bank Employees shall retain all accrued
vacation and sick leave benefits, provided such amounts have been fully accrued
for by First Savings or the Bank as of the Effective Date and are in accordance
with such amounts provided in past practice by First Savings and the Bank. As of
the Effective Date, all participants under the Bank's defined contribution plan
shall become 100% vested in all participant accounts. With respect to Great
Falls Bank's vacation, sick leave and severance policies, GCB shall cause Great
Falls Bank to recognize, for purposes of eligibility to participate, vesting and
benefits accrual purposes, all prior years of service that any Bank Employee had
with the Bank or First Savings, except that any Bank Employees who are
involuntarily terminated within six months following the Effective Date shall
not be entitled to receive severance benefits under GCB's severance policies;
such employees shall instead be paid severance benefits in accordance with, and
subject to, the provisions of this Section 5.9.
GCB shall pay each of the four (4) Bank Employees disclosed on Item 4.2
of the First Savings Disclosure Schedule a retention bonus ("Retention Bonus")
if and only if such Bank Employee shall either (a) remain in the employ of GCB
or a subsidiary of GCB for a period of three (3) months following the Effective
Date or (b) be terminated from such employment within three (3) months following
the Effective Date by GCB or a subsidiary of GCB without cause. The amount of
the Retention Bonus to be paid to each listed individual shall be as specified
in Item 4.2 of the First Savings Disclosure Schedule; the aggregate pretax cost
of the Retention Bonuses shall not exceed $90,748.
Following the Effective Date, GCB shall cause Great Falls Bank to honor
in accordance with its terms the Change In Control Severance Agreement between
Brian McCourt and the Bank.
32
<PAGE>
GCB and Great Falls Bank agree to pay the cost of out- placement
services for any Bank Employees that are terminated without cause within the six
month period following the Effective Date. Bank Employees who are entitled to
receive a Retention Bonus shall not be entitled to any severance benefits until
they have been employed by GCB for six months; provided, that such Bank
Employees shall be entitled to one month's advance notice of termination during
such six month period or to one month's pay in lieu of such notice.
Any employee of First Savings or the Bank as of the Effective Date,
other than Dr. Kostakopoulos, Mr. McCourt or any employee who is entitled to
receive a Retention Bonus, who is involuntarily terminated for any reason, or
whose job or terms of employment is substantially changed (and who thereafter
terminates his or her employment), other than terminations or changes made for
just cause, within six months after the Effective Date will receive the
severance benefits set forth in the following sentence. Such severance benefits
will be paid in a lump-sum payment equal to one (1) week's salary for every year
or partial year of employment service with First Savings or the Bank, with a
minimum severance benefit equal to two (2) weeks of salary and the maximum
severance benefit payable shall be twenty-six (26) weeks.
5.10. Accounting and Financial Matters. Notwithstanding
--------------------------------
that First Savings believes that it has established all reserves
and taken all provisions for possible loan losses required by
GAAP and applicable laws, rules and regulations, First Savings
recognizes that GCB may have adopted different loan, accrual and
reserve policies (including loan classifications and levels of
reserves for possible loan losses). From and after the date of
this Agreement to the Effective Time, First Savings and GCB shall
consult and cooperate with each other with respect to (i)
conforming, based upon such consultation, the loan, accrual and
reserve policies of First Savings and the FS Subsidiaries to
those policies of GCB and its subsidiaries to the extent
appropriate (provided, that any required change in the practices
of First Savings and the FS Subsidiaries in connection with the
matters in this clause (i) need not be effected until the parties
receive all necessary stockholder approvals and all approvals and
authorizations of the public authorities referred to in Sections
2.5 and 3.3 hereof), and (ii) conforming, based upon such
consultation, the composition of the securities portfolios and
overall asset/liability management position of First Savings and
the FS Subsidiaries, and GCB and its subsidiaries, to the extent
appropriate.
5.11. 1999 Closing. Notwithstanding any other provision of this
Agreement, the Closing will not occur prior to January 1, 1999.
33
<PAGE>
5.12. Key Man Insurance. Notwithstanding anything herein to the
contrary, in the event that Dr. Kostakopoulos shall die after the date of the
Agreement, but prior to the Effective Time, First Savings, the Bank, GCB or
Great Falls Bank, as the case may be, shall pay to the estate of Dr.
Kostakopoulos, out of the aggregate proceeds received by First Savings, the
Bank, GCB or Great Falls Bank from the key man life insurance currently held by
First Savings or the Bank on the life of Dr. Kostakopoulos, the sum that would
have been payable under his Employment Agreement upon the Effective Date (as
disclosed in Item 5.7 of the First Savings Disclosure Schedule) but for his
prior death, without regard to the stated limitation in Section 5.7 of $712,136,
and no sums shall be payable by First Savings, Bank, any other FS Subsidiary,
GCB or Newco pursuant to Section 5.7 of this Agreement. Further, in the event
that Dr. Kostakopoulos shall die after the date of the Agreement, but prior to
the Effective Time, First Savings shall pay a special cash dividend on the
shares of common stock of First Savings in the aggregate amount equal to the
amount, if any, by which the aggregate proceeds received by First Savings or the
Bank from the key man life insurance held by First Savings or the Bank on the
life of Dr. Kostakopoulos exceeds the sum of (a) the payments made to the estate
of Dr. Kostakopoulos pursuant to the first sentence of this Section 5.11 and (b)
the aggregate amount of all premiums paid by First Savings, the Bank or any
other FS Subsidiary in respect of such key man life insurance; provided,
however, that the aggregate special cash dividend payable on the Common Stock of
First Savings shall be reduced by the amount of any shortfall referenced at
Section 1.5 herein. Notwithstanding anything herein to the contrary, this
Section 5.12 shall be construed as an agreement as to which Dr. Kostakopoulos
and the shareholders of First Savings are intended to be third party
beneficiaries and shall be enforceable by such persons and their heirs and
representatives.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF GCB AND NEWCO
The obligations of GCB and Newco to consummate the transactions
contemplated hereby are subject to the satisfaction of the following conditions
unless waived by GCB and Newco:
6.1. Representations and Warranties. The representations and warranties
of First Savings set forth in Article II hereof shall be true and correct in all
material respects as of the date of this Agreement and as of the date of the
Closing contemplated by Article VIII hereof (the "Closing Date") as though made
on and as of the Closing Date.
6.2. Covenants. First Savings shall have performed and
complied in all material respects with each and every covenant,
34
<PAGE>
agreement and condition required by this Agreement to be performed or complied
with by it prior to the Closing Date.
6.3. Certificate. First Savings shall have furnished to GCB a
certificate of its President in form and substance reasonably satisfactory to
GCB to the effect that (i) the representations and warranties contained in
Article II of this Agreement are true and correct in all material respects at
and as of the Closing Date as though such representations and warranties were
made on the date thereof, (ii) First Savings has complied with all terms,
covenants and provisions of this Agreement required to be performed or complied
with by First Savings prior to the Closing Date, (iii) the statement of
stockholders equity furnished pursuant to Section 5.6 is in accordance with the
books of First Savings and fairly presents the stockholders equity of First
Savings as of the end of the month preceding the month in which the Closing
occurs, and (iv) to the knowledge of First Savings, the conditions set forth in
Sections 6.5, 6.6 and 6.7 hereof are each satisfied as of the Closing Date.
6.4. Opinion of Counsel. GCB shall have received an opinion of Malizia,
Spidi, Sloane & Fisch, P.C., counsel to First Savings, dated the date of the
Closing and addressed to GCB, in form and substance satisfactory to counsel to
GCB, as to the matters set forth in Exhibit B attached hereto. In rendering such
opinion, such counsel may rely upon certificates of officers of First Savings
and of public officials as to matters of fact.
6.5. No Governmental or Other Proceeding or Litigation. No
-------------------------------------------------
order of any court or administrative agency (including, without
limitations any banking regulatory authority) shall be in effect
on the Closing Date or on the Effective Date which restrains or
prohibits any transaction contemplated hereby or which would
limit or otherwise affect in a material respect the operation of
Bank and Great Falls Bank as a single entity following
consummation of the Bank Merger or of First Savings and Newco as
a single entity following consummation of the Holding Company
Merger; no suit, action, or proceeding by any governmental body
or other person or entity, or investigation or inquiry by any
governmental body, shall be pending or, in the case of a
governmental body, threatened against GCB, Newco, Great Falls
Bank, First Savings or any FS Subsidiary, which challenges the
validity or legality, or seeks to restrain the consummation, of
any transaction contemplated hereby or which seeks to limit or
otherwise affect the operation of Bank and Great Falls Bank as a
single entity following the consummation of the Bank Merger or of
First Savings and Newco as a single entity following consummation
of the Holding Company Merger; and no written advice shall have
been received by GCB or First Savings or their respective counsel
from any governmental body, and remain in effect, stating that an
action or proceeding will, if the Holding Company Merger and/or
the Bank Merger is consummated or sought to be consummated, be
35
<PAGE>
filed seeking to invalidate or restrain said transaction or limit or otherwise
affect the operation of Bank and Great Falls Bank as a single entity following
the consummation of the Bank Merger or of First Savings and Newco as a single
entity following consummation of the Holding Company Merger.
6.6. Approvals and Consents. The approval of the stockholders of First
Savings referred to in Section 1.8 hereof, and all approvals and authorizations
of the public authorities referred to in Sections 2.5 and 3.3 hereof, shall have
been obtained, and all waiting periods specified by law shall have passed. Also,
First Savings shall have obtained non- applicability determinations from the New
Jersey Department of Environmental Protection with respect to the New Jersey
Industrial Site Responsibility Act for all real property owned by First Savings
or any FS Subsidiary on the date hereof.
6.7. First Savings's Stockholders Equity. First Savings's Adjusted Net
Worth (as defined in Section 1.5) as of the end of the month preceding the month
in which the Closing is to take place shall be not less than $9,045,707.
6.8. Transaction Expenses. First Savings shall have furnished to GCB
(a) an accounting of all Transaction Expenses (as that term is defined in
Section 1.5 hereof) and (b) final bills from all providers of significant
services in connection with the transactions contemplated by this Agreement,
including its investment bankers, attorneys and accountants.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF FIRST SAVINGS
The obligations of First Savings to consummate the transactions
contemplated hereby are subject to the satisfaction of the following conditions
unless waived by First Savings:
7.1. Representations and Warranties. The representations and warranties
of GCB set forth in Article III hereof shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date.
7.2. Covenants. GCB and Newco shall have performed and complied in all
material respects with each and every covenant, agreement and condition required
by this Agreement to be performed or complied with by it prior to the Closing
Date.
7.3. Certificate. Each of GCB and Newco shall have furnished to First
Savings a certificate of its President or Vice President in form and substance
reasonably satisfactory to First Savings to the effect that (i) the
representations and warranties contained in Article III of this Agreement are
true and correct
36
<PAGE>
in all material respects at and as of the Closing Date as though such
representations and warranties were made on the date thereof, (ii) it has
complied with all terms, covenants and provisions of this Agreement required to
be performed or complied with by it prior to the Closing Date and (iii) to the
knowledge of GCB or Newco, as the case may be, the conditions set forth in
Sections 7.5 and 7.6 hereof are each satisfied as of the Closing Date.
7.4. Opinion of Counsel. First Savings shall have received an opinion
of Williams, Caliri, Miller & Otley, counsel to GCB and Newco, dated the date of
the Closing and addressed to First Savings, in form and substance satisfactory
to counsel to First Savings, as to the matters set forth in Exhibit C attached
hereto. In rendering such opinion, such counsel may rely upon certificates of
officers of GCB and Newco and of public officials as to matters of fact.
7.5. No Governmental or Other Proceeding or Litigation. No
-------------------------------------------------
order of any court or administrative agency (including, without
limitations any banking regulatory authority) shall be in effect
on the Closing Date or on the Effective Date which restrains or
prohibits any transaction contemplated hereby or which would
limit or otherwise affect in a material respect the operation of
Bank and Great Falls Bank as a single entity following
consummation of the Bank Merger or of First Savings and Newco as
a single entity following consummation of the Holding Company
Merger; no suit, action, or proceeding by any governmental body
or other person or entity, or investigation or inquiry by any
governmental body, shall be pending or, in the case of a
governmental body, threatened against GCB, Newco, Great Falls
Bank, First Savings or any FS Subsidiary, which challenges the
validity or legality, or seeks to restrain the consummation, of
any transaction contemplated hereby or which seeks to limit or
otherwise affect the operation of Bank and Great Falls Bank as a
single entity following the consummation of the Bank Merger or of
First Savings and Newco as a single entity following consummation
of the Holding Company Merger; and no written advice shall have
been received by GCB or First Savings or their respective counsel
from any governmental body, and remain in effect, stating that an
action or proceeding will, if the Holding Company Merger and/or
the Bank Merger is consummated or sought to be consummated, be
filed seeking to invalidate or restrain said transaction or limit
or otherwise the operation of Bank and Great Falls Bank as a
single entity following the consummation of the Bank Merger or of
First Savings and Newco as a single entity following consummation
of the Holding Company Merger.
7.6. Approvals and Consents. All approvals and authorizations of the
public authorities referred to in Sections 2.5 and 3.3 hereof, shall have been
obtained, and all waiting periods specified by law shall have passed.
37
<PAGE>
7.7. Fairness Opinion. First Savings shall have received the opinion of
Ryan, Beck & Co., in form and substance reasonably satisfactory to said Board of
Directors, that the consideration to be paid to the stockholders of First
Savings pursuant to this Agreement is fair from a financial point of view to
such stockholders as of the date of Board adoption of the Agreement and as of
the date of mailing of the proxy statement to the stockholders of First Savings
related to the Meeting of Stockholders contemplated by Section 1.8 hereof. The
foregoing opinion shall be included in the proxy statement. Provided, that the
condition specified in this Section 7.7 hereof shall be conclusively deemed to
have been waived if First Savings shall not have exercised its right to
terminate this Agreement by reason of the failure of such condition on or before
the first to occur of (i) the date of the proxy statement distributed in
connection with the meeting of shareholders of First Savings contemplated in
Section 1.8 hereof or (ii) the 120th day following the date of this Agreement.
ARTICLE VIII
CLOSING
Unless this Agreement shall have been terminated pursuant to a
provision of Article IX hereof, a closing (the "Closing") will be held, as soon
as practicable after the satisfaction or waiver of the conditions set forth in
Articles VI and VII hereof (but in no event prior to January 1, 1999; and in no
event later than the last to occur of January 1, 1999 or the 45th day following
receipt of all required regulatory approvals), at the offices of Williams,
Caliri, Miller & Otley, 1428 Route 23, Wayne, New Jersey. The parties agree that
the target date for such Closing shall be January 28, 1999. At the Closing, the
documents referred to in Articles VI and VII hereof will be exchanged by the
parties. Immediately thereafter, (i) the Certificate of Merger contemplated by
Section 1.7 hereof shall be filed in accordance with the Act and (ii) the Bank
Merger Agreement will be approved by the GCB as the sole shareholder of Great
Falls Bank and by First Savings as the sole shareholder of the Bank and shall be
filed with the Department of Banking and Insurance of the State of New Jersey.
ARTICLE IX
TERMINATION
9.1. Termination. This Agreement may be terminated at any
time prior to Closing:
(a) by First Savings, by written notice to GCB, if (i) First
Savings, without violating any of its covenants hereunder, shall have received
an unsolicited offer to enter into a transaction of the type described in
Section 4.2(g) and the Board of Directors of First Savings, after consulting
with counsel,
38
<PAGE>
shall have determined in the exercise of its fiduciary duties that it should
terminate this Agreement and pursue such offer or (ii) the approval of the
stockholders of First Savings referred to in Section 1.8 hereof shall not be
obtained;
(b) by GCB, by written notice to First Savings, if the
approval of the stockholders of First Savings referred to in Section 1.8 hereof
shall not be obtained within 120 days following the date of this Agreement;
(c) by GCB, by written notice to First Savings, if (i) any
representation or warranty of First Savings set forth in Article II hereof shall
not be true and correct in all material respects, (ii) First Savings shall
breach any covenant or agreement made by it herein or (iii) any condition set
forth in Article VI hereof shall not have been satisfied by July 29, 1999.
Provided, that (x) GCB may not terminate this Agreement by reason of the failure
of a condition set forth in Article VI if the failure of such condition shall be
caused by a breach by GCB and/or Newco of any covenant or agreement made by it
herein; (y) GCB may not terminate this Agreement by reason of a breach of any
covenant or agreement made by First Savings hereunder unless First Savings shall
fail to cure such breach within thirty (30) days following a written demand to
cure by GCB; and (z) GCB may not terminate this Agreement by reason of a breach
of any representation or warranty made by First Savings in this Agreement unless
First Savings shall fail to eliminate the matter or condition which makes such
representation or warranty untrue, within thirty (30) days following a written
demand to cure by GCB.
(d) by First Savings, by written notice to GCB, if (i) any
representation or warranty of GCB set forth in Article III hereof shall not be
true and correct in all material respects, (ii) GCB or Newco shall breach any
covenant or agreement made by it herein or (iii) any condition set forth in
Article VII hereof shall not have been satisfied by July 29, 1999. Provided,
that (x) First Savings may not terminate this Agreement by reason of the failure
of a condition set forth in Article VII if the failure of such condition shall
be caused by a breach by First Savings of any covenant or agreement made by it
herein; (y) First Savings may not terminate this Agreement by reason of a breach
of any covenant or agreement made by GCB hereunder unless GCB shall fail to cure
such breach within thirty (30) days following a written demand to cure by First
Savings; and (z) First Savings may not terminate this Agreement by reason of a
breach of any representation or warranty made by GCB in this Agreement unless
GCB shall fail to eliminate the matter or condition which makes such
representation or warranty untrue, within thirty (30) days following a written
demand to cure by First Savings.
9.2. Liability Upon Termination.
39
<PAGE>
(a) If this Agreement is terminated in accordance with Section 9.1, the
transactions contemplated hereby shall be abandoned without further action by
either party hereto, and the parties shall have no further liabilities or
obligations hereunder except as provided in the following subsections of this
Section 9.2.
(b) In the event First Savings shall exercise its right of termination
under Section 9.1(a), First Savings shall pay to GCB a termination fee of
$500,000.
(c) In the event GCB shall exercise its right of termination under
Section 9.1(b), First Savings shall pay to GCB a termination fee of $500,000.
(d) First Savings shall pay to GCB, as liquidated damages, a
termination fee of $500,000 in the event that (i) this Agreement is terminated
by GCB pursuant to Section 9.1(c) hereof by reason of the breach by First
Savings of any covenant or agreement (but not any representation or warranty)
made by it herein, or (ii) this Agreement is terminated by First Savings unless
such termination is expressly permitted pursuant to Section 9.1(a) or 9.1(d)
hereof.
(e) GCB shall pay to First Savings, as liquidated damages, a
termination fee of $500,000 in the event that (i) this Agreement is terminated
by First Savings pursuant to Section 9.1(d) hereof by reason of the breach by
GCB or Newco of any covenant or agreement (but not any representation or
warranty) made by it herein, or (ii) this Agreement is terminated by GCB unless
such termination is expressly permitted pursuant to Section 9.1(b) or 9.1(c)
hereof.
(f) In the event that GCB shall terminate this Agreement pursuant to
Section 9.1(c) hereof by reason of the breach by First Savings of any
representation or warranty made by it herein other than those contained in
Section 2.5, First Savings shall reimburse GCB for all costs incurred by it in
connection with the negotiation and performance and enforcement of this
Agreement, as well as all costs of enforcing this Section 9.1(f).
(g) The maximum amount to which a party shall be entitled from the
other upon termination of this Agreement shall be $500,000, regardless of the
number of grounds which such party may have for claiming a termination fee or
other payment hereunder.
ARTICLE X
INDEMNIFICATION
10.1. Indemnification. In the event of any threatened or
actual claim, action, suit, proceeding or investigation, whether
40
<PAGE>
civil or administrative, including, without limitation, any such claim, action,
suit, proceeding or investigation in which any person who is now, or has been at
any time prior to the date of this Agreement, or who becomes prior to the
Effective Date, a director or officer or employee of First Savings or any of its
Subsidiaries (the "Indemnified Parties") is, or is threatened to be, made a
party based in whole or in part on, or arising in whole or in part out of, or
pertaining to (i) the fact that he is or was a director, officer or employee of
First Savings, any of the Subsidiaries of First Savings or any of their
respective predecessors or (ii) this Agreement or any of the transactions
contemplated hereby, whether in any case asserted or arising before or after the
Effective Date, the parties hereto agree to cooperate and use their best efforts
to defend against and respond thereto. It is understood and agreed that after
the Effective Date, GCB shall indemnify and hold harmless, as and to the extent
permitted by New Jersey law, each such Indemnified Party against any losses,
claims, damages, liabilities, costs, expenses (including reasonable attorney's
fees and expenses in advance of the final disposition of any claim, suit,
proceeding or investigation to each Indemnified Party to the fullest extent
permitted by law upon receipt of any undertaking required by applicable law),
judgments, fines and amounts paid in settlement in connection with any such
threatened or actual claim, action, suit, proceeding or investigation, and in
the event of any such threatened or actual claim, action, suit, proceeding or
investigation (whether asserted or arising before or after the Effective Date),
the Indemnified Parties may retain counsel reasonably satisfactory to them after
consultation with GCB; provided, however, that (1) GCB shall have the right to
assume the defense thereof and upon such assumption GCB shall not be liable to
any Indemnified Party for any legal expenses of other counsel or any other
expenses subsequently incurred by any Indemnified Party in connection with the
defense thereof, except that if GCB elects not to assume such defense or counsel
for the Indemnified Parties reasonably advises that there are issues which raise
conflicts of interest between GCB and the Indemnified Parties, the Indemnified
Parties may retain counsel reasonably satisfactory to them after consultation
with GCB, and GCB shall pay the reasonable fees and expenses of such counsel for
the Indemnified Parties, (2) GCB shall in all cases be obligated pursuant to
this paragraph to pay for only one firm of counsel for all Indemnified Parties,
(3) GCB shall not be liable for any settlement effected without its prior
written consent (which consent shall not be unreasonably withheld) and (4) GCB
shall have no obligation hereunder to any Indemnified Party when and if a court
of competent jurisdiction shall ultimately determine, and such determination
shall have become final and nonappealable, that indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by applicable
law. Any Indemnified Party wishing to claim Indemnification under this Article
X, upon learning of any such claim, action, suit,
41
<PAGE>
proceeding or investigation, shall notify promptly GCB thereof, provided that
the failure to so notify shall not effect the obligations of GCB under this
Article X except to the extent such failure to notify prejudices GCB. GCB's
obligations under this Article X continue in full force and effect for a period
of six (6) years from the Effective Date; provided, however, that all rights to
indemnification in respect of any claim ( a "Claim") asserted or made within
such period shall continue until the final disposition of such Claim.
Notwithstanding anything to the contrary contained in this Section 10.1, in no
event shall GCB's obligations under this Section 10.1 with respect to
indemnification or the advancement of expenses be greater than the obligations
of First Savings and the FS Subsidiaries with respect thereto set forth as of
the date of this Agreement in the Certificate of Incorporation, By-laws or
similar governing documents of First Savings and the FS Subsidiaries.
10.2. Directors and Officers Liability Insurance. GCB shall cause the
persons serving as officers and directors of First Savings and the Bank
immediately prior to the Effective Date to be covered for a period of six years
from the Effective Date by the directors' and officers' liability insurance
policy maintained by First Savings and the Bank (provided that GCB may
substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are not less advantageous than such
policy) with respect to acts or omissions occurring prior to the Effective Date
which were committed by such officers and directors in their capacity as such.
10.3 Successors. In the event GCB or the Surviving Corporation or any
of its successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger, or (ii) transfers or conveys all or substantially
all of its properties and assets to any person, then, and in each such case, to
the extent necessary, proper provision shall be made so that the successors and
assigns of GCB or the Surviving Corporation, as the case may be, assume the
obligation set forth in this Article X.
10.4 Beneficiaries; Survival. The provisions of this Article X are
intended to be for the benefit of, and shall be enforceable by, each Indemnified
Party and his or her heirs and representatives; and the provisions of this
Article X will survive the Effective Date.
ARTICLE XI
MISCELLANEOUS
11.1. Parties in Interest. Nothing expressed or implied in this
Agreement is intended or shall be construed to confer upon or give to any
person, firm or corporation other than the parties
42
<PAGE>
hereto any rights or remedies under or by reason of this Agreement or any
transaction contemplated hereby, except as specifically provided in this
Agreement.
11.2. Entire Agreement; Amendments. This Agreement contains the entire
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to its subject matter, except as specifically provided to the contrary
herein. This Agreement may be amended or modified only by writing signed by the
parties hereto.
11.3. Headings. The article and section and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.4. Notices. All notices, claims, certificates, requests, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, sent by facsimile transmission and
confirmed by first class mail, or mailed by certified mail, return receipt
requested and postage prepaid, as follows:
If to GCB or Newco:
Greater Community Bancorp
55 Union Boulevard
Totowa, New Jersey 07512
Attention: Mr. George E. Irwin, President
Telecopier Number: 973-942-9816
with copy to:
Stuart M. Geschwind, Esq.
Williams, Caliri, Miller & Otley
1428 Route 23
Wayne, New Jersey 07474
Telecopier Number: 973-694-0302
If to First Savings:
First Savings Bancorp of Little Falls, Inc.
115 Main Street
Little Falls, New Jersey 07424
Attention: Dr. Haralambos S. Kostakopoulos,
President
Telecopier Number: (973) 785-1832
with copy to:
43
<PAGE>
Richard Fisch, Esq.
Malizia, Spidi, Sloane & Fisch, P.C.
One Franklin Square
1301 K Street, N.W.
Suite 700 East
Washington, D.C. 20005
Telecopier Number: (202) 434-4661
or to such other address as the party to whom notice is to be given may have
furnished to the other parties in writing in accordance herewith. If mailed as
aforesaid, any such communication shall be deemed to have been given on the
third business day following that on which the piece of mail containing such
communication is posted; provided that any communication sent by telecopy or
telex and confirmed by mail (postage prepaid) shall be deemed to have been given
at the time of transmission.
11.5. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
11.6. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New
Jersey.
11.7. Gender and Number; Person. Any reference expressed in any gender
shall be deemed to include each of the other genders, and the singular shall be
deemed to include the plural and vice versa, unless the context otherwise
requires. The term "person" as used in this Agreement, unless the context
otherwise requires, shall include any individual and any corporation,
partnership, association, or other entity or group.
11.8. Waivers. Any party to this Agreement may, by written notice to
the other parties hereto, waive any provision of this Agreement. The waiver by
any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach of any other
provision of this Agreement.
11.9. Parties Bound; Assignment. This Agreement and all of the
provisions hereof shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by either party hereto without the prior written consent of
the other party.
11.10. Release of restrictions on restricted stock. First
Savings and Dr. Kostakopoulos acknowledge that the release of the
44
<PAGE>
restrictions on restricted stock held by Dr. Kostakopoulos as of February 17,
1998 will give rise to taxable income to Dr. Kostakopoulos and an expense
deduction for tax purposes to First Savings.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
GREATER COMMUNITY BANCORP
By: /s/ George E. Irwin
Name: George E. Irwin
Title: President
GCB ACQUISITION CORP. (Newco)
By: /s/ George E. Irwin
Name: George E. Irwin
Title: President
FIRST SAVINGS BANCORP OF LITTLE
FALLS, INC.
By: /s/ Haralambos S. Kostakopoulos
Name: Haralambos S. Kostakopoulos
Title: President
Haralambos S. Kostakopoulos hereby executes this Agreement for the sole
purpose of agreeing to be bound by Section 5.7, 5.12 and 11.10 hereof. Dr.
Kostakopoulos acknowledges that GCB and Newco have insisted that he agree to be
so bound as a condition of entering into this Agreement, and that they are
entering into this agreement in reliance on said agreement.
/s/ Haralambos S. Kostakopoulos
Haralambos S. Kostakopoulos
45
<PAGE>
EXHIBIT A
Bank Merger Agreement
AGREEMENT OF MERGER
THIS AGREEMENT, made this ___ day of _________, 1998, by and between
GREAT FALLS BANK, a Banking Corporation duly organized and existing under the
laws of the State of New Jersey (hereinafter referred to as "GFB"), and a wholly
owned subsidiary of Greater Community Bancorp, having an address for purposes of
this Agreement located at 55 Union Boulevard, Totowa, New Jersey 07512; and
FIRST SAVINGS BANK OF LITTLE FALLS, F.S.B., a federal savings bank duly
organized and existing under the laws of the United States of America
(hereinafter referred to as "First Savings"), and a wholly owned subsidiary of
First Savings Bancorp Of Little Falls, Inc., having an address for purposes of
this Agreement located at 115 Main Street, Little Falls, New Jersey 07424.
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1. Provisions Required Pursuant To NJSA 17:9A-134.
(a) The name of the sole merging bank (as the term "merging
bank" is defined in NJSA 17:9A-132) is First Savings Bank Of Little
Falls, F.S.B.. The principal office of the merging bank is located at
115 Main Street, Little Falls, New Jersey 07424 . The merging bank has
branch offices at the following locations: 123 Newark Pompton Turnpike,
Singac, New Jersey 07424 and 100 Washington Avenue, Little Ferry, New
Jersey 07643.
(b) The name of the receiving bank (as the term "receiving
bank" is defined in NJSA 17:9A-132) is Great Falls Bank. The principal
office of the receiving bank is located at 55 Union Boulevard, Totowa,
New Jersey 07512. The Receiving Bank has branch offices at the
following locations: __________________________________________.
(c) The name by which the receiving bank will be known after
the merger is effected will be Great Falls Bank.
(d) The persons who will be the directors of the receiving
bank after the merger is effected are: John L. Soldoveri; George E.
Irwin; Alfred R. Urbano; Joseph A. Lobosco; M. A. Bramante; Robert J.
Conklin; William T.
46
<PAGE>
Ferguson; Annemarie Appleton; David M. Corry; Robert B.
Coyle; and Richard Steuerwald.
(e) The officers of the receiving bank immediately prior to
the time that the merger is effected shall continue to be the officers
of the receiving bank after the merger is effected. On the date hereof,
the officers of the receiving bank are: John L. Soldoveri - Chairman;
George E. Irwin President and Chief Executive Officer; Edith A Leonhard
Secretary; Naqi A. Naqvi - Treasurer; Roy Kay, Jr. - Senior Vice
President; Toby W. Giardiello - Vice President; Rosalie Cannarozzi -
Assistant Vice President; Donald E. Estes Assistant Vice President;
Robin A. Peterson - Assistant Vice President; and William Warnet -
Assistant Vice President.
(f) The location at which the principal office of the
receiving bank will be maintained after the merger is effected will be
55 Union Boulevard, Totowa, New Jersey
07512.
(g) The locations then occupied by the principal offices and
branch offices of the merging bank and the receiving bank which will be
continued as branch offices of the receiving bank after the merger is
effected will be all locations listed in Sections 1.1(a) and 1.1(b)
hereof.
(h) The effective date of the merger will be the date on which
the Effective Time (as defined in Section 9 hereof) occurs.
(i) After the merger is effected: The capital stock of the
receiving bank will consist of 380,000 authorized shares of Common
Stock, having a par value of $5.00 per share, of which all shares shall
be issued and outstanding. The amount of the surplus which the
receiving bank would have, assuming that the Effective Date of the
merger was June 30, 1998, is $________________, as of that date.
(j) All of the shares of Common Stock of the merging bank
issued and outstanding at the Effective Time shall be exchanged at the
Effective Time for $1.00 in cash.
2. Actions To Be Taken. Upon performance in all material respects of
all covenants and obligations of the parties contained herein and upon
fulfillment in all material respects or waiver of all conditions to the
obligations of the parties contained herein, at the Effective Time and pursuant
to N.J.S.A. 17:9A-132 through 17:9A-148, inclusive, the following will occur:
(a) First Savings will be merged with and into GFB.
GFB shall be the receiving bank, and the separate existence
47
<PAGE>
and corporate organization of First Savings shall cease, and thereupon
GFB and First Savings shall be a single banking corporation;
(b) GFB, as the receiving bank, will succeed, insofar
as permitted by law, to all rights, assets, liabilities and
obligations of First Savings in accordance with the New
Jersey Banking Act of 1948 With Supplements, Etc. (the "New
Jersey Banking Act");
(c) Any pending action by or against First Savings shall
survive the merger and GFB, as the receiving bank, shall be substituted
for First Savings therein;
(d) The Certificate of Incorporation of GFB will be and remain
the Certificate of Incorporation of the receiving bank until amended as
provided by law;
(e) The By-Laws of GFB will be and remain the By-Laws of the
receiving bank until amended as provided by law;
3. Shares of GFB. Following the Effective Time, all issued and
outstanding shares of Common Stock of GFB will continue to be fully paid and
non-assessable shares of common stock of the receiving corporation. Each
certificate of GFB evidencing ownership of any such shares will continue to
evidence ownership of the same number of shares of common stock of the receiving
corporation.
4. Shares of First Savings. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof, all of the
shares of Common Stock of the merging bank issued and outstanding at the
Effective Time shall be exchanged for $1.00 in cash.
5. Submission of Agreement of Merger for Approval. Following execution
of this Agreement of Merger by both parties hereto, this Agreement of Merger
shall be submitted to the Commissioner of Banking and Insurance of the State of
New Jersey (the "Commissioner") in accordance with N.J.S.A. 17:9A-136.
6. Approval by Sole Stockholder of GFB. Greater Community Bancorp, as
sole stockholder of GFB, shall adopt a resolution adopting and approving this
Agreement of Merger following approval of this Agreement of Merger by the
Commissioner and subject to the satisfaction of all conditions to the
obligations of Greater Community Bancorp and GCB Acquisition Corp. to consummate
the transactions contemplated by the Agreement and Plan of Merger, dated
September 4, 1998, among Greater Community Bancorp, GCB Acquisition Corp. and
First Savings Bancorp of Little Falls, Inc.
48
<PAGE>
7. Approval by Sole Stockholder of First Savings. First Savings Bancorp
of Little Falls, Inc., as sole stockholder of First Savings, shall adopt a
resolution adopting and approving this Agreement of Merger following approval of
this Agreement of Merger by the Commissioner and subject to the satisfaction or
waiver of all conditions to the obligations of First Savings Bancorp of Little
Falls, Inc. to consummate the transactions contemplated by the Agreement and
Plan of Merger, dated September 4, 1998, among Greater Community Bancorp, GCB
Acquisition Corp. and First Savings Bancorp of Little Falls, Inc.
8. Certification and Filing of Agreement of Merger. Upon approval of
this Agreement of Merger by the sole stockholder of GFB and the sole stockholder
of First Savings, as provided in Sections 7 and 8 hereof, such approvals shall
be promptly certified by the president or a vice president of GFB and First
Savings and the certifications shall be attached to a counterpart of this
Agreement of Merger. Thereafter, said certifications and counterpart of this
Agreement of Merger shall be filed in the Department of Banking and Insurance of
the State of New Jersey, all as provided in N.J.S.A. 17:9A-137.
9. Effective Time. The date and time at which the Merger shall become
effective (the "Effective Time") shall be 11:59 p.m. on the day the Agreement of
Merger is filed with the Department of Banking and Insurance of the State of New
Jersey in accordance with N.J.S.A. 17:9A-137.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
GREAT FALLS BANK
By:
Name:
Title:
FIRST SAVINGS BANK OF LITTLE
FALLS, F.S.B.
By:
Name:
Title:
49
<PAGE>
EXHIBIT B
Matters To Be Opined Upon By Counsel To First Savings
1. First Savings and each FS Subsidiary other than the Bank is a
corporation organized and validly existing under the laws of the State of New
Jersey and has all requisite corporate power and authority and all necessary
governmental authorizations to own, lease and operate its properties and to
conduct its business.
2. The Bank is a savings bank organized and validly existing under the
laws of the United States and has all requisite corporate power and authority
and all necessary governmental authorizations to own, lease and operate its
properties and to conduct its business.
3. First Savings has all requisite corporate power and authority to
execute and deliver the Agreement and to perform its obligations thereunder, and
the execution, delivery and performance of the Agreement, and the consummation
by First Savings of the transactions contemplated thereby, have been duly
authorized by all requisite corporate action of First Savings.
4. The Bank has all requisite corporate power and authority to execute
and deliver the Bank Merger Agreement and to perform its obligations thereunder,
and the execution, delivery and performance of the Bank Merger Agreement, and
the consummation by the Bank of the transactions contemplated thereby, have been
duly authorized by all requisite corporate action of the Bank.
5. All of the outstanding shares of First Savings Stock are validly
issued, fully paid and non-assessable.
6. The Agreement has been duly executed and delivered by First Savings
and, assuming due authorization, execution and delivery thereof by GCB and
Newco, constitutes the legal, valid and binding obligation of First Savings
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity).
7. The Bank Merger Agreement has been duly executed and delivered by
the Bank and, assuming due authorization, execution and delivery thereof by
Great Falls Bank, constitutes the legal, valid and binding obligation of the
Bank (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity).
8. Neither the execution, delivery and performance of the Agreement by
First Savings, the execution, delivery and performance of the Bank Merger
Agreement by the Bank, nor the consummation by First Savings and the Bank of the
transactions contemplated by the
50
<PAGE>
Agreement and the Bank Merger Agreement, will (i) conflict with, or result in a
breach of, any of the terms, conditions or provisions of the Certificate of
Incorporation or By-Laws of First Savings or the Bank or (ii) conflict with,
result in a breach or violation of, give rise to a default under, or result in
the acceleration of performance under (whether or not after the giving of notice
or lapse of time or both), any agreement or instrument, to which First Savings,
the Bank or any other FS Subsidiary is a party, of which the Opinion Giver has
Actual Knowledge, after due inquiry.
As used in the opinions expressed in such opinion, the phrase "of which the
Opinion Giver has Actual Knowledge" shall refer only to the actual knowledge of
the attorneys within the firm rendering such opinion who have given substantive
attention to First Savings and/or the FS Subsidiaries during the course of such
firm's representation of First Savings in connection with the transactions
contemplated by the Agreement and does not (a) include constructive knowledge of
matters or information or (b) except for their review of the documents referred
to in such opinion, imply that they have undertaken any independent
investigation (i) with any persons outside of the firm or (ii) as to the
accuracy or completeness of any factual representation, information or other
matter made or furnished in connection with the transactions contemplated by the
Agreement and does not imply that they know of any fact or circumstance
contradicting the statement that is qualified by such phrase or that they know
such statement to be correct.
51
<PAGE>
EXHIBIT C
Matters To Be Opined Upon By Counsel To GCB and Newco
1. Each of GCB and Newco is a corporation organized and validly
existing under the laws of the State of New Jersey and has all requisite
corporate power and authority and all necessary governmental authorizations to
own, lease and operate its properties and to conduct its business.
2. Great Falls Bank is a banking corporation organized and validly
existing under the laws of the State of New Jersey and has all requisite
corporate power and authority and all necessary governmental authorizations to
own, lease and operate its properties and to conduct its business.
3. Each of GCB and Newco has all requisite corporate power and
authority to execute and deliver the Agreement and to perform its obligations
thereunder, and the execution, delivery and performance of the Agreement, and
the consummation by GCB and Newco of the transactions contemplated thereby, have
been duly authorized by all requisite corporate action of GCB and Newco.
4. Great Falls Bank has all requisite corporate power and authority to
execute and deliver the Bank Merger Agreement and to perform its obligations
thereunder, and the execution, delivery and performance of the Bank Merger
Agreement, and the consummation by the Bank of the transactions contemplated
thereby, have been duly authorized by all requisite corporate action of the
Bank.
5. The Agreement has been duly executed and delivered by GCB and Newco
and, assuming due authorization, execution and delivery thereof by First
Savings, constitutes the legal, valid and binding obligation of GCB and Newco
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity).
6. The Bank Merger Agreement has been duly executed and delivered by
Great Falls Bank and, assuming due authorization, execution and delivery thereof
by the Bank, constitutes the legal, valid and binding obligation of Great Falls
Bank (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity).
7. Neither the execution, delivery and performance of the Agreement GCB
and Newco, the execution, delivery and performance of the Bank Merger Agreement
by Great Falls Bank, nor the consummation by GCB, Newco and Great Falls Bank of
the transactions contemplated by the Agreement and the Bank Merger Agreement,
will conflict with, or result in a breach of, any of the terms, conditions or
provisions
52
<PAGE>
of the Certificate of Incorporation or By-Laws of GCB, Newco or
Great Falls Bank.
8. The approval of the shareholders of GCB is not required as a matter
of law to effectuate the transactions contemplated by the Agreement.
53
<PAGE>
EXHIBIT D
CERTIFICATE OF THE DIRECTORS OF
FIRST SAVINGS BANK OF LITTLE FALLS, INC.
Reference is made to the Agreement and Plan of Merger, dated as of
September 4, 1998 (the "Agreement"), among Greater Community
Bancorp, GCB Acquisition Corp., and First Savings Bancorp of Little
Falls, Inc. ("First Savings"). Capitalized terms used herein have
the meanings given to them in the Agreement.
Each of the following persons, being directors of First Savings, express their
intention, subject to their fiduciary duties, to vote or cause to be voted all
shares of First Savings Common Stock which are held by such person, or over
which such person exercises full voting control (other than shares with respect
to which such person exercises control in a fiduciary capacity, as to which no
agreement is made hereby), in favor of the Merger contemplated by the Agreement.
/s/ Emanuel M. Kontokosta
Emanuel M. Kontokosta
/s/ Haralambos S. Kostakopoulos
Haralambos S. Kostakopoulos
/s/ Frederick J. Tedeschi
Frederick J. Tedeschi
/s/ Nikos Mouyiaris
Nikos Mouyiaris
54
